crealogix group annual report 2010/2011 · we adjusted our marketing strategy slightly; we now...

CREALOGIX GROUP ANNUAL REPORT 2010/2011

HAUPTRUBRIK /// UNTERRUBRIK

Mobile solutionsThe intensive use of smartphones and tablet PCs, as well

as increasing mobility, are generating new customer needs.

People who travel a great deal want to make efficient use

of this time, e.g. for learning purposes, to perform banking

transactions or obtain information about the products or

services supplied by a particular company. CREALOGIX ca-

ters for those needs and develops customised mobile so-

lutions for businesses in the e-banking, e-learning and user

experience areas.

Four such mobile solutions by CREALOGIX are presented

on pages 10, 32, 42 and 78 of this annual report.

The English version is a translation of the German ver-

sion. The German version is legally binding.

CONTENTS ANNUAL REPORT 2010 /2011

Key figures for the Group 02

Report by the Chairman of the Board of Directors 05

Corporate governance 13

Share 27

Consolidated financial report 35

Holding company financial report 81

Addresses and sites 91

01

KEY FIGURES

INCOME STATEMENT

KEY FIGURES

Amounts in CHF thousand July – June2007/2008 1)

July – June2008/2009


Juli – Juni2010 / 2011

Operating revenue 62 852 57 720 52 495 52 843

chang ein % 1.7 –8.2 –9.1 0.7

Operating result before interest, taxes depreciation and amortisation (EBITDA)

3 553 6 727 4 993 6 391

as % operating revenue 5.7 11.7 9.5 12.1

Operating profit (EBIT) –960 4 533 3 276 5 123

as % operating revenue –1.5 7.9 6.2 9.7

Consolidated profit –2 658 2 568 3 199 4 692

as % operating revenue –4.2 4.4 6.1 8.9

as % shareholders’ equity –4.0 5.1 5.9 8.2

Net cash flow from operating activities 10 212 13 419 4 134 8 292

as % operating revenue 16.2 23.2 7.9 15.7

Cash flow from investment activities –2 571 –460 –990 – 937

Depreciation/amortisation 4 513 2 194 1 717 1 268

Depreciation/amortisation 290.9 262.0 233.4 232.7

Full-time freelance capacity 48.4 26.3 21.3 23.2

FTE capacity including freelancers 339.3 288.3 254.7 255.9

Operating revenue per FTE including freelancers

185 200 206 206

Personnel expenses per FTE 134 131 138 140

Headcount as of 30 June 324 279 265 236

FTE capacity, June 309.8 240.5 233.4 220.6

1) Figures/values according to IFRS; not adapted to Swiss GAAP FER

KEY FIGURES

0203

Share prices in CHF July – June2007/2008 1)



Juli – Juni2010 / 2011

High 101.50 74.00 69.95 110.00

Low 67.00 52.00 53.00 57.00

as of 30 June 74.00 55.00 58.00 96.00

Market capitalisation (million)

High 108.6 79.2 74.8 117.7

Low 71.7 55.6 56.7 61.0

Market capitalisation as of 30 June (million) 79.2 58.9 62.1 102.7

as % of operating revenue 126.0 102.0 118.2 194.4

as % of shareholders’ equity 119.9 117.0 113.9 179.9

Profit per share – undiluted –2.571 2.448 3.040 4.411

Price-earnings ratio (P/E) n. a. 22.5 19.1 21.8

Shareholders’ equity per share (at par) 62.2 48.7 51.5 53.5

Price-book value (P/B) 1.2 1.1 1.1 1.8

Amounts in CHF thousand 30 June2008 1)

30 June2009

30 June2010

30 June2011

Total assets 84 669 65 599 67 982 69 385

Current assets 58 977 55 408 58 860 60 965

of which cash, cash equivalents and marketable

38 213 39 692 42 273 46 509

Non-current assets 25 692 10 191 9 122 8 420

Liabilities 18 626 15 285 13 481 12 300

Shareholders’ equity 66 043 50 314 54 501 57 085

Equity ratio (%) 78.0 76.7 80.2 82.3

1) Figures/values according to IFRS; not adapted to Swiss GAAP FER

All values in CHF, unless mentioned separately

SHARE DEVELOPMENT

BALANCE SHEET DATA

“Our strategy of developing proprietary software products for the finance in-dustry and marketing them at home and abroad has proved a great success.”

0405

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

Dear Sir or Madame

The CREALOGIX Group looks back upon a successful

financial year 2010/2011. The focus on our strengths in

software products for the financial industry has proved

successful. The conversion of our Group, which began

four years ago, from a pure software service provider to

a product supplier, has now been completed. During

the financial year we divested three business units, but

we were still able to increase our Group’s operating rev-

enues from CHF 52.5 to CHF 52.8 million. This was

achieved through substantial organic growth with our

own software products, especially in e-banking and

e-payment. The CREALOGIX Group reported a record

net profit of CHF 4.7 million (previous year CHF 3.2 mil-

lion). As a shareholder you were also able to benefit in

the last financial year from a distribution of CHF 2 per

share from the reserves set aside from capital contri-

butions, and also from the share price gain of CHF 58

to CHF 96.

We are holding firm to our medium-term growth target

of CHF 100 million net profit for the CREALOGIX Group.

With the acquisition of Abaxx e-banking activities in

Germany in July 2011, we took another big step in the

direction of growth and internationalisation. We now

have excellent opportunities for market access to the

banking industry in Germany and throughout Europe.

We will continue to look at attractive acquisition oppor-

tunities both in Switzerland and abroad.

The Board of Directors will be proposing to the Annual

General Meeting a further distribution from the reserves

set aside from capital contributions of CHF 15 per share.

/// Bruno RichleChairman of the Board of Directors and CEO CREALOGIX Holding AG


Trend of operating revenues and results

The consolidated operating revenues of CREALOGIX for

the financial year 2010/2011 stand at CHF 52.8 million

(previous year: CHF 52.5 million). This figure reflects a

pleasing trend in demand for our software products. On

the other hand, the software service provision sector

had to contend with falling market prices because users

are increasingly relying on the recruitment of temporary

personnel. We therefore reorganized these activities in

the course of the financial year. The capacities of soft-

ware engineers with outstanding training which were

released in that way were used to effectively strengthen

the development departments of our product segments.

For the financial year 2010/2011, the CREALOGIX

Group EBIT stands at CHF 5.1 million (previous year:

CHF 3.3 million), which is equivalent to an EBIT margin

of 10 per cent (previous year: 6 per cent). Including the

net proceeds of the disposal of subsidiary companies,

this gives a financial profit of CHF 0.2 million and net

profit for the year of CHF 4.7 million, with a profit mar-

gin of 9 per cent (previous year: CHF 3.2 million, profit

margin 6 per cent).

The continuing robust financial strength of our Group is

reflected in our cash resources which rose in the period

under review by CHF 5.3 million, and in our equity cap-

ital whose value increased from CHF 54.5 million to

CHF 57.1 million. Even after the distribution of CHF 2

per share in January 2011 from the reserves set aside

from capital contributions, our equity ratio still stands at

an impressive 82 per cent (previous year 80 per cent).

E-banking: strong demand and innovations

In the year under review, the e-banking business at

CREALOGIX developed very satisfactorily and substan-

tially increased our sales and profitability. In the year

under review, most clients brought their software up to

date by changing over to the latest releases. We took an

important strategic step forward by gaining a major

foreign bank as a new client for our CLX.Sentinel online

security solution. We also invested a total of more than

twenty person-years in the development of new prod-

ucts – in mobile banking, but also for our standard

CLX.E-banking product range and for online security

solutions built around CLX.Sentinel.

OPERATING REVENUE

IN CHF MILLION

70

60

50

40

30

20

10

0

2007 / 08 2008 / 09 2009 / 10 2010/11

CONSOLIDATED PROFIT

IN CHF MILLION

5.0

4.0

3.0

2.0

1.0

0

–1.0

–2.0

–3.0

2007 / 08 * 2008 / 09 2009 / 10 2010/11

*Not adjusted to Swiss GAAP FER.


At the end of July 2011, i. e. already in the new financial

year, we took over the entire e-banking and portal client

business of Cordys Deutschland AG. This business unit –

widely known as “Abaxx” – is an e-banking pioneer on

the German software market and makes an admirable

addition to the CREALOGIX product portfolio. With

Abaxx we are strengthening our presence on the Ger-

man market and gaining an established client base and

attractive products, together with an experienced and

proven team.

E-payment: expectations exceeded

Our products for Swiss payment transactions remain in

high demand. To defend our market leadership, we in-

vested some ten person-years in the renewal of our

product range and further extended the relevant soft-

ware development capacities. We also entered into an

exclusive partnership with the ETH Dacuda spin-off and

developed a special payment app for recognizing Swiss

payment slips for ScanMouse, a unique product. The

market launch is scheduled for autumn 2011. To our

great satisfaction, client relationship managers of the

Swiss financial institutions actively recommend our hard-

ware and software products.

Education: concentration of energies in the

educational sector

By concentrating energies we achieved a significant im-

provement of our market position in education and fur-

ther education. We invested in mobile learning and

launched a new product with a pilot client. In Germany,

we adjusted our marketing strategy slightly; we now of-

fer the CLX.Evento planning module as a standalone

product and, by doing so, are also able to gain German

manufacturers of campus management software as dis-

tribution partners.

ERP/Unified Communications: sale of the imple-

menting business in Germany and Austria

In January 2011, CREALOGIX divested two business

units: CREALOGIX ERP AG, Thalheim (Austria) and

CREALOGIX Unified Communications GmbH, Cologne

(Germany). The implementing business of CREALOGIX

ERP AG, Villingen (Germany) was also sold. The disposal

of the business for the implementation of standard

products is a consequence of our focus on the develop-

0607

CASH AND CASH EQUIVALENTS

AND SECURITIES IN CHF MILLION

50

45

40

35

30

25

20

15

10

5

0

2007 / 08 2008 / 09 2009 / 10 2010/11

FULL TIME EMPLOYEES (FTE)

350

300

250

200

150

100

50

0

2007 / 08 2008 / 09 2009 / 10 2010/11

ment of our own software products. These changes do

not affect the ERP business unit in Switzerland.

Personnel matters

The disposal of the two business units and the sale of

the implementing business of CREALOGIX ERP AG, Vil-

lingen (Germany) also had an impact on our work force.

This fell from 265 employees at the end of June 2010 to

236 at the end of June 2011.

Outlook

Our strategy of developing our own software products

for the finance industry and marketing them both at

home and abroad has proved successful. Because of the

volatile environment, specific forecasts for the financial

year 2011/2012 are very hard to make. But we expect

our sales to be increased through further acquisitions.

We also hope to be able to maintain our earning power.

The acquisition of Abaxx in July 2011 opens up good

opportunities for CREALOGIX to access the banking in-

dustry market in Germany and elsewhere in Europe.

Fifteen years of CREALOGIX – exceptional distribution

of CHF 15 per share planned

In the past fifteen years the CREALOGIX Group has

earned substantial profits and generated high free cash

flows. The Board of Directors has therefore decided to

propose to the Annual General Meeting on 2 November

2011 an exceptional distribution of CHF 15 per share

from the reserves set aside from capital contributions.

Following the Corporation Tax Reform which took effect

on 1 January 2011, the distribution will be paid out

without any deduction of withholding tax and will be

tax-free for private shareholders.

The CREALOGIX growth strategy remains unchanged

and can still be financed in full from our own resources,

even after this distribution. After allowance for the

amount to be distributed, cash and cash equivalents in

excess of CHF 23 million are still stated in the balance

sheet and will permit further attractive distributions and

dividend yields in future. With an equity ratio in excess

of 76 per cent, the business continues to benefit from

an extremely robust financial base.


Acknowledgements

On behalf of the Board of Directors and the Group Man-

agement, I wish to thank all our employees for their

hard work in the past financial year. We wish to thank

our clients for the confidence placed in our services and

for their close cooperation. Our cordial thanks are also

due to you, our shareholders, for your confidence in the

CREALOGIX Group.

Bruno Richle

Chairman of the Board of Directors and CEO

A takeway Bank

MOBILE BANKING

The challengeMobile business is becoming increasingly important for banks. Customers are looking for a takeaway bank for their trouser pocket or briefcase. The great chal-lenge in developing a mobile e-banking solution resides in the wide variety of mobile appliances and the different operating systems which are in use today.

MOBILE BANKING

1011

The solutionThe mobile-banking function in the CLX.E-Banking Software Suite is the right solution. Alongside the versions for mobile phones, including the iPhone, another version has been developed for tablet PCs and iPads. The client can personalise his e-banking portal with mobile banking. In other words, he can put together a range of functions to suit his own particular needs, depending on the banking transactions which he wishes to han-dle via the mobile appliance. He can choose from a wide range of mobile-banking apps. They include apps to perform payment transactions and process stock market orders./// www.crealogix.com/e-banking

CORPORATE GOVERNANCE

Group structure CREALOGIX Group 14

Capital structure 15

Board of Directors 17

Executive Group Management 21

Benefi ts and share-based payments 23

Shareholder participation rights 24

Changes in control and defensive measures 25

Auditors 25

Information policy 26

Share Information 27

Appendix: Details to share-based payments 28

1312

CREALOGIX CORPORATE GOVERNANCE


Management and controlling at the highest corporate levels at CREALOGIX are conducted

in accordance with the principles and rules of the Swiss Code of Best Practice of economie-

suisse and the SIX Swiss Exchange.

The information required to be published in accordance with the Swiss Exchange Corporate

Governance Directive is presented below in the prescribed sequence and numbering.

1 Group structure CREALOGIX Group

CREALOGIX Holding AG is a corporation with headquarters in Zurich (Switzerland). The

registered shares of the corporation are traded on the SiX Swiss Exchange under the

identifi cation number 1 111 570 and ISIN CH0011115703. As of 30 June 2011, market

capitalisation was CHF 102.7 million.

1.1 Group structureThe participations held by the CREALOGIX Holding AG in the different subsidiary com-

panies are listed in detail on page 44 (scope of consolidation as at 30 June 2011) of the

annual report.

CREALOGIX Transport & Logistics AG was newly incorporated on 11 August 2010.

CREALOGIX Unifi ed Communications GmbH, Cologne/Germany was sold to its former

owner on 29 December 2010.

CREALOGIX ERP AG, Thalheim/Austria was sold to WIKA Systems Schweiz AG on

30 December 2010.

terna GmbH acquired all the business activities of CREALOGIX ERP AG, Villingen/

Germany with effect from 1 February 2011 under the terms of an asset deal.

CREALOGIX E-Banking AG, Zuchwil, was merged with CREALOGIX E-Payment AG

with retroactive effect to 1 July 2011.

CREALOGIX Holding AGZürich

100% CREALOGIX E-Business AG Bubikon

100% CREALOGIX E-Banking AG Zurich

100% CREALOGIX E-Payment AG Hünenberg

100% CREALOGIX Transport & Logistics AG Zurich

100% CREALOGIX ERP AG Villingen / Germany

100% CREALOGIX AG Stuttgart / Germany

100% CREALOGIX Corporation Toronto / Canada

GROUP STRUCTURE

15


14

1.2 Significant shareholdersIn the year under review one disclosure was made in accordance with Article 20 of the

Federal Act on Stock Exchanges and Securities Trading.

On 30 July 2011, CREALOGIX Holding AG reported a participation of less than 3 per-

cent. As of 30 June 2011 the following shareholders had a proportion of votes of more

than 3 percent at their disposal, whereby shares held as well as options held are con-

sidered in the calculation of the percentage of votes:

Shareholders Portion of shares Number of shares Number of options

Dr. Richard Dratva 23.88% 253 567 1 951

Bruno Richle 23.26% 246 887 1 951

Daniel Hiltebrand 15.47% 163 324 2 159

Peter Süsstrunk 7.07% 74 000 1 686

Noser Management AG 3.93% 42 000 0

The first four of the shareholders named (founder shareholders) have concluded a share-

holder pooling agreement. Under the terms of this agreement they undertake to jointly

exercise their voting rights in all substantive items of business transacted at the Annual

General Meeting of CREALOGIX Holding AG (voting trust).

Upon sale of shares in the company to a third party by a founding shareholder, the other

founding shareholders have the right of first refusal at the conditions offered by the third

party (right of first refusal). In the event of the sale of at least 30 percent of the share

capital of the company to a third party by two or three founding shareholders, the re-

maining founding shareholders are entitled to request that their shares be simultaneously

tendered for sale at the same conditions (take-along).

1.3 Cross-shareholdingsThere are no cross-shareholdings with other enterprises.

2 Capital structure

2.1 CapitalAs of 30 June 2011 CREALOGIX Holding AG had the following share capital at its disposal:

Ordinary share capital CHF 8 560 000 divided into 1 070 000 registered shares with a par value of CHF 8 per share.

2.2 Authorised and contingent capital in particular

Authorised share capital CHF 2 400 000 divided into 300 000 registered shares with a par value of

CHF 8 per share, with issue possible until 30 October 2011.

Contingent share capital CHF 2 000 000 (for employee option plans*) divided into 250 000 registered shares with a par value of CHF 8 per share.

* Detailled information on employee stock option plans can be found in the appendix to the cor-porate governance report on the pages 28 to 31.

The Board of Directors is authorised to exclude the subscription right of shareholders

in respect of the approved capital either in whole or in part and to grant that right to

third parties if the new shares concerned (1) are to be used to acquire companies by an


exchange of shares or (2) to finance the acquisition of enterprises, parts of enterprises

or participations or new investment projects of the company, or (3) for a share place-

ment on the capital market. Shares for which subscription rights are granted, but not

taken up, are to be used by the Board of Directors in the interest of the company or

allowed to lapse. The share capital may be increased by the conversion of freely

disposable equity capital pursuant to Art. 652d OR.

The timing of the particular issue and the issued amount, together with the timing of

the entitlement to a dividend and the nature of the contributions, will be determined

by the Board of Directors.

2.3 Changes in share capitalNo change in the capital structure of the company occurred in the last three years.

2.4 Shares and participation certificatesAs of 30 June 2011 CREALOGIX Holding AG had issued 1 070 000 fully paid registered

shares with a par value of CHF 8 per share. CREALOGIX Holding AG owned 3467

shares of treasury stock as of 30 June 2011, equivalent to 0.3 percent. A registered

share entitles the holder to one vote at the annual general meeting of the general as-

sembly (one share, one vote).

All shares are entitled to dividends. Dividend policy is explained on page 27 of the

Annual Report.

CREALOGIX Holding AG has not issued any participation certificates.

2.5 Bonus certificatesCREALOGIX Holding AG has not issued any bonus certificates.

2.6 Limitations on transferability of shares and nominee registrationRegistered shares of CREALOGIX Holding AG can be transferred without restrictions.

The registration of purchasers who hold shares for their own account in the register of

shareholders is not bound by any condition.

Nominee registrations are governed by the Regulation Regarding Registration of Nomi-

nees in the Register of Shareholders. This regulation was adopted by the Board

of Directors on 18 September 2006.

Under particular conditions the Board of Directors registers individuals, who in their

registration application do not expressly declare that shares are held for their own ac-

count (“nominees”), up to a maximum of 3 percent of the entire share capital with

voting rights in the register of shareholders. The Board of Directors can enter nominees

in the register of shareholders as shareholders with more than 3 percent of voting

rights provided the nominee discloses the name, address and stock of shares of the

person in whose account shares are held. The Board of Directors establishes an agree-

ment regarding obligation to inform with such nominees.

2.7 Convertible bonds and warrantsThere are no convertible bonds in existence.As of 30 June 2011, CREALOGIX Holding AG had a total of 39205 share options outstanding. The Company issued no other options. The issued share options com-prise a share capital of TCHF 314. For details to option period, exercise price and further information to the share options please refer to pages 28 to 31.The current share option plan will not be renewed upon expiry. Since the business year 2008/2009 no allotments were made.

17


16

3 Board of Directors

The Board of Directors is currently composed of two executive members (in dual offi ce

on one hand the Chairman and CEO, as well as the Vice-Chairman and CSO) and three

non-executive members.

Executive Members

The dual offi ce of the Chairman and CEO is consistent with the current size of the

CREALOGIX Group. It similarly proves advantageous that the CSO functions as Vice-

Chairman of the Board of Directors. The Board can thus make use of the profound

expertise and market knowledge of the Chairman/CEO and Vice-Chairman/CSO for its

decisions without restriction. Furthermore this ensures effi cient preparation of the

basis for complex decisions, enabling fl exibility and speed in the most important deci-

sion processes.

Non-executive Members

None of the non-executive board members exercised an executive function previously

within the CREALOGIX Group or stands in a critical business relationship to it.

Bruno RichleChairman, dipl. El.-Ing. HTL, Swiss citizen,

CEO of the CREALOGIX Group.

Following his studies of electrical engineering with focus in computer

science and communications engineering at the Hochschule Rappers-

wil, Bruno Richle was employed from 1985 to 1989 in the Bührle

Group. During this time, from 1986 he was Head of the Department

of Electronic Engineering with Oerlikon Aerospace in Montreal,

Canada, and responsible for the electronic engineering of the guided

missile system ADATS. From 1990 to 1996 he was a member of the

executive management and Technical Director with Teleinform AG in

Bubikon, at that time the leading Swiss company in telematics. In

1996 he was a founding member of CREALOGIX, which entered the

Swiss Ex change SWX under his leadership in 2000. Additional super-

visory board mandates: Yachtwerft Portier AG. Foundation board

mandates: Foundation FUTUR and Innovation Foundation of the

Bank of Canton Schwyz as well as "Hochschulrat

der Hochschule für Technik in Rapperswil (HSR)".

3.1 Members of the Board of Directors


Jean-Claude PhiliponaMember, lic.oec.publ., Swiss citizen.

Following professional activity with the Federal Price Monitor

(1977–1980) and a sojourn in the USA (1981), Jean-Claude Philipona

was employed from 1982 to 1989 with PricewaterhouseCoopers as a

management consultant in a leadership role with focus on strategy,

organisation and controlling. He then transferred to Papierfabrik Bib-

erist, where from 1989 to 1997 as divisional head of fi nance and ad-

ministration in the executive management he was instrumental in the

renewal and restructuring process instituted with the extension proj-

ect Biber-Nova, among other areas. In 1997 Mr. Philipona entered

Adval Tech Holding AG as CFO in view of the company’s IPO. Since

2001 he is Chief Executive Offi cer of the Adval Tech Group with full

operative responsibility. Additional mandates: chairman of the board

of Wolfensberger AG, Bauma, board member of Swissmem.

Beat SchmidMember, Prof. em. Dr., Swiss citizen.

The Swiss Federal Institute of Technology Zurich awarded Beat

Schmid a Master of Science in theoretical physics, a doctoral degree

in mathematics and a postdoctoral lecture qualifi cation. Since 1987

he has been Professor for Information Management at the University

of St. Gallen. From 1989 to 1997 he was Director of the Institute of

Information Management. Since its founding in 1998 he has been

Director of the Institute for Media and Communication Management

at the University of St. Gallen. In summer of 2008 he was emerited.

Additional supervisory board mandates: Abraxas Informatik AG,

St. Gallen and Zurich.

Richard DratvaVice Chairman, Dr. oec. HSG, Swiss citizen,

Chief Strategy Offi cer (CSO) of the CREALOGIX Group.

From 1987 to 1991 Richard Dratva was employed as an internal con-

sultant with the Swiss Bank Corporation (today: UBS AG). From 1992

to 1994 he was engaged as a research associate at the Institute of

Information Management at the University of St. Gallen. From 1995

to 1996 he acted as a consultant with Teleinform AG, before becom-

ing a founding member of CREALOGIX in 1996.

19


18

3.2 Other activities and interestsInformation on other activities and interests is disclosed together with curricula vitae

on pages 17 and 19.

The law fi rm of Wenger & Vieli AG provides consulting services for the CREALOGIX

Group. The amount of compensation for these services is given on page 74 of the

Annual Report.

3.3 Election and term of officeThe members of the Board of Directors are elected by the general assembly respec-

tively for a term of offi ce of three business years. Reelection is allowed. The Board of

Directors constitutes itself and elects the Chairman and Vice-Chairman from among

its members.

Information concerning the term of offi ce of the current members of the Board is

listed in the following table:

Function elected since GA elected until GA

Bruno Richle Chairman 1996 2012

Richard Dratva Vice Chairman 1996 2012

Christoph Schmid Member 2000 2012

Beat Schmid Member 2001 2013

Jean – Claude Philipona Member 2005 2011

Christoph SchmidMember, Dr. iur. and attorney-at-law, Swiss citizen.

Christoph Schmid’s professional career began in the legal depart-

ment of Ringier AG in Zurich. Following this he was employed as

auditor and judicial clerk at the district court of Meilen and later as

an attorney with Arnold & Porter in Washington D.C. In 1986 he

joined Wenger & Vieli AG in Zurich as an attorney, and has been a

partner of the fi rm since 1989. Christoph Schmid is a member of the

Board of Directors of Robert Bosch Internationale Beteiligungen AG,

Kessler & Co AG and EBS Service Company Limited (chairman).


3.4 Internal organisationResponsibilities and competencies

The Board of Directors convenes as often as required by business, at a minimum of four

times per year. In the business year 2010/2011 the Board met five times for 4–5 hour

meetings. One meeting was conducted as a telephone conference. Participant in the meet-

ings were Juerg Haessig, CFO, and as required other members of the Executive Group

Management respectively.

The Board of Directors is quorate if the majority of its members are present. The Board

makes its decisions with the majority of votes rendered. In case of a tie the Chairman’s vote

is decisive. The Board of Directors is responsible for defining corporate strategy, the super-

vision of the corporation and the establishment of its organisation, the appointment and

recall of members of the Executive Group Management as well as the definition of ac-

counting, financial planning and financial controlling. The Board decides upon acquisitions

and sets annual targets as well as the annual and investment budget for the Group.

The Annual Report was approved at the meeting of the Board of Directors on 08 Septem-

ber 2011.

Committees

The Board of Directors has formed an Audit Committee and a Compensation Committee.

The Audit Committee supports and advises the Board in questions of accounting, inter-

nal controlling, composition of quarterly and annual reports as well as collaboration

with and evaluation of the services of the group auditor. The Audit Committee is com-

posed primarily of non-executive members of the Board.

Currently Jean-Claude Philipona (chairman) and Dr. Christoph Schmid form the Audit

Committee. The Audit Committee convenes three times yearly as a rule. Participant in

the meetings are Juerg Haessig, CFO, and Peter Süsstrunk, Chief Corporate Finance re-

spectively. In the business year 2010/2011 the Audit Committee met three times for

meetings of 4–5 hours. Representatives of the group auditor were present at two of

the three meetings.

The Compensation Committee is responsible for the formulation of recommendations

to the Board with regard to the compensation of the members of the Board and the

Executive Group Management as well as the allotment of share-based payments. The

Committee prepares the human resource planning on the level of the Board and the

Executive Group Management. This includes the definition of criteria for the selection

of candidates and the preparation of the selection process as well as succession plan-

ning and promotion of young employees. The Committee composed of: Dr. Christoph

Schmid (chairman), Prof. em. Dr. Beat Schmid and Dr. Richard Dratva. The Compensa-

tion Committee convenes twice yearly as a rule. In the business year 2010/2011 the

Committee met twice for 2–3 hour meetings.

In all cases resolutions remain reserved to the full Board of Directors.

21


20

3.5 Competencies and information toolsAs far as allowed by law and permissible by statute, the Board of Directors delegates

the entire business execution and responsibility to the management (also called

“Executive Group Management”).

In particular the following responsibilities inhere to the Executive Group Management

regarding the operative organisation and leadership of the CREALOGIX Group:

– Monitoring of ongoing business;

– Leadership of accounting and establishment of the budget;

– Implementation and maintenance of the internal control system;

– Arrangement of the organisation of leadership between the Executive Group Man-

agement and the management bodies of group companies;

– Engagement and dismissal of personnel, in as much as this is not reserved for the

Board of Directors;

– Preparation and execution of the resolutions and directives of the Board;

– Preparation of the basis for decisions for the attention of the Board concerning sig-

nificant investments, cooperations etc.;

– Reporting on the course of business for the attention of the Board;

– Observance and fulfilment of legal publication obligations pertinent to the stock ex-

change following orientation of the Board in advance.

3.6 Information and controlling tools vis-à-vis the Executive Group ManagementThe Executive Group Management reports to the Board of Directors on a monthly basis

regarding the current business situation. The reports are based on controlling tools em-

ployed for monitoring the status of projects and

finances. These grant a comprehensive overview of the business situation and allow

statements regarding future capacity utilisation.

The Executive Group Management informs the members of the Board moreover without

delay by telephone or in writing regarding extraordinary occurrences and events (e.g.

changes in areas of business, loss of a significant customer, resignation of a member of

the executive management etc.) that are of great significance for the business develop-

ment of the CREALOGIX Group.

The organisational regulations contain further stipulations regarding information of the

Board of Directors by the Executive Group Management.

4 Executive Group Management

4.1 Members of the Executive Group Management The Executive Group Management assumes the operative functions and represents the

CREALOGIX Group externally. The Executive Group Management consists of five mem-

bers, two of whom are executive members of the Board of Directors.


Thomas F.J. AvedikMember of the Executive Group Management, CEO CREALOGIX

E-Banking AG, Dipl. Ing. ETH, Swiss citizen.

After studying at ETH in Zurich, Thomas Avedik conceived and

developed mathematical and statistical simulation models. 1991 he

joined Swiss Bank Corporation (today: UBS AG) and from 1997 he

was in charge of the design and upgrade of the UBS E-Banking. In

addition to projects such as the implementation of the UBS market

data system for clients and advisors and the design and implemen-

tation of an E-Banking security solution, he developed the global

E-Banking-Strategy of UBS. Since July 1, 2007 Thomas Avedik is

CEO of CREALOGIX E-Banking AG.

Richard DratvaDr. oec. HSG, Swiss citizen, CSO of the CREALOGIX Group.

Detailed information on page 18.

Jürg A. HässigMember of the Executive Group Management, Chief Financial Offi cer,

lic. oec. HSG, Swiss citizen.

After graduation from the University of St. Gallen (HSG) with a mas-

ter's degree in business administration and economics and a major

in fi nance and controlling in 1983, Juerg A. Haessig started his ca-

reer at Arthur Andersen in the audit practise. From 1986 to 1990

he held a management function in fi nance at today's Flughafen

Zürich AG and up to 1995 at Saurer Group. Prior to his activity at

CREALOGIX Group, he held the position of Group Controller and

deputy CFO at Zellweger Luwa Group. Since November 1, 2008 he

holds the position of CFO of CREALOGIX Holding AG.

Bruno Richledipl. El.-Ing. HTL, Swiss citizen, CEO of the CREALOGIX Group

Detailinformationen siehe Seite 17.

Louis-Paul WickiMember of the Executive Group Management, CEO of CREALOGIX

E-Business AG, Dr. oec. HSG, Swiss citizen.

Louis-Paul Wicki both studied and received his doctorate at the Uni-

versity of St. Gallen (HSG). Following his studies he was employed

from 1989 to 1992 with Digital Equipment (DEC), where he devel-

oped software for fi nancial institutions after attending DEC College.He

worked at the Institute for Information Management of the University

of St. Gallen from 1992 to 1995, achieving his doctorate in close col-

laboration with the Bank of Canton Zurich on the topic “Bank-wide

Value Creation Potential of a Computer Science Platform.” From 1996

to 2000 Louis-Paul Wicki was engaged with the St. Gallen Consulting

Group (SCG), where he entered the executive management in 1999.

Since 2000 he is CEO of CREALOGIX E-Business AG.

The members of the Executive Group Management are:

23


22

4.2 Other activities and interestsInformation on additional activities and commitments of interest is given along with

curricula vitae on page 17 and 18. Further information on the members of executive

management can be found under www.crealogix.com.

4.3 Management contractsNo management contracts have been established.

5 Benefits and share-based payments

Compensation to related persons or parties is disclosed in the Group appendix to the

Annual Report on pages 72 and 74.

5.1 Content and method of determination for benefits and sharebased paymentsThe Board of Directors takes decisions regarding benefits and share-based payments to

members of the Board and the Executive Group Management (including non-executive

members of the Board). The executive members of the Board abstain from voting in con-

nection with decision concerning them. Proposals of the Compensation Committee build

the basis for these decisions. The Committee assesses the performance of the Group Ex-

ecutive Management for the attention of the Board of Directors. The amount of the re-

muneration is set at sole discretion taking into account the existing benefit structure as

well as Information received from external specialists on a yearly basis. No external con-

sultants were involved.

The remuneration of the non-executive members of the Board of Directors consists of a

fixed fee of TCHF 30 p.a., compensation per meeting and share-based payments. The

remuneration of the Executive Group Management (including the executive members of

the Board of Directors) comprises a fixed and a variable performance based component.

The fixed compensation comprises a base salary linked to responsibility and fringe ben-

efits (company car, partial takeover of pension fund contribution, business expenses).

The amount of the variable component, depending on the function, is linked to the op-

erative performance of the respective business and/or the Group (Sales, EBIT). The busi-

ness related targets can account for 60 percent and the Group targets for 40 percent to

the determination of the variable component. The portion of the variable component is

approximately 40 percent of the total remuneration. In the reporting year, the achieve-

ment of targets reached between 24 and 100 percent.

Further, share-based payments schemes are in place. The allotment of share-based pay-

ments is carried out by the Board of Directors at the proposal of the Compensation

Committee as a rule once per year according to the provisions for share-based payments.

The criteria for allotment of options are professional classification

(junior, regular, senior etc.) as well as an evaluation of potential regarding leadership,

teamwork capability and motivation.

These schemes are explained on pages 28 to 31 of this annual report.

The remunerations and interests of the representative office according to Art. 663b CO

are listed on page 25 as well as pages 72 to 74.


5.2 Transparency of compensation, participations and loans from issuers with foreign domicileNot applicable

6 Shareholder participation rights

Participation and custody rights of shareholders comply with the stipulations of Swiss

stock corporation law.

6.1 Voting rights restrictions and representationSee Articles of Association, Art. 14.

There are no restrictions of voting rights. Every shareholder can have shares repre-

sented by proxy at the annual general meeting by another shareholder with written

power of attorney, by the CREALOGIX Holding AG, or by an independent proxy desig-

nated by the company.

The register of shareholders will be closed ten days prior to the annual general meet-

ing. Shareholders not listed in the register by this date have no voting rights at the

annual general meeting.

6.2 Statutory quorumSee Articles of Association, Art. 15.

The general assembly votes and passes its resolutions with the absolute majority of the

attendant and proxy share votes to the extent that legal regulations or statutes do not

prescribe a qualified majority for passage of a resolution as mandatory.

The statutes of CREALOGIX Holding AG foresee no special quorum above and beyond

the stipulations of stock corporation law.

6.3 Convening the general assembly See Articles of Association, Art. 9.

The general assembly is convened by the Board of Directors. The calling of the meeting

must occur at the latest twenty days prior to the date of the annual general meeting.

The invitation to shareholders occurs through publication in the Swiss Official Gazette

of Commerce. The Board can designate other avenues of publication. Provided that the

names and addresses of all shareholders are known to the company and legal regula-

tions or statutes do not stipulate other procedures as mandatory, the invitation to

shareholders can also be conducted as legally valid in letter form to all the addresses

listed in the register of shareholders. In this instance a publication in the Swiss Official

Gazette of Commerce can be omitted.

6.4 Entrance of items to the agendaSee Articles of Association, Art. 9, 10.

In convening the general assembly, the items of discussion as well as the proposals of

the Board of Directors and of the shareholders that require a general assembly to be

implemented must be made known. Furthermore the items of discussion and the pro-

posals made by shareholders representing a value of at least one million Swiss francs

that have been submitted to the Board in writing before the calling of the meeting

must be placed on the agenda.

25


24

6.5 Registration of shares See Articles of Association, Art. 5.

The Board of Directors administers a register of shareholders for registered shares in

which the owners and benefactors are listed with name and address or respectively

with company name and headquarter location. Only those persons registered as share-

holders in the register of shareholders are held as shareholder or beneficiary in relation

to the corporation.

7 Change in control and defensive measures

7.1 Obligation to announce a public takeover offerThe CREALOGIX Holding AG statutes contain neither an opting-out nor an opting-up

clause. Whoever acquires one third (33 1/3 percent) of the share capital of the corpora-

tion is required in accordance with the Federal Act on Stock Exchanges and Securities

Trading (BEHG article 32) to submit a public takeover offer for the remaining shares.

7.2 Clauses regulating change in control No agreements have been made with Board Members, members of Executive Group

Management or other members of management regarding a change in control (no

“golden parachutes”).

8 Auditors

8.1 Duration of mandate and term of office of lead auditorPricewaterhouseCoopers in Zurich has served as group auditor of CREALOGIX Holding

AG since 2 November 2009. The auditor in charge since this date has been Mr. Hans-

peter Gerber. The rotation plan of the auditor in charge agrees to the law and thus is

seven years. The group auditor is elected by the general assembly on an annual basis

respectively for one year. It conducts its work within the scope of the pertinent legal

regulations as well as in compliance with the principles of the profession.

8.2 Auditing feesIn business year 2010/2011, the agreed audit fees of PricewaterhouseCoopers in Zur-

ich amounted to TCHF 92.

8.3 Additional feesIn business year 2010/2011 fees for consulting services by PricewaterhouseCoopers in

Zurich amounted to TCHF 6.


8.4 Information tools of external auditorsThe auditors inform the Executive Group Management and Board of Directors regularly

concerning determinations and suggestions for improvement.

At least once per year a meeting of the Audit Committee takes place at which repre-

sentatives of the auditing company take part and provide information on its determi-

nations, particularly regarding the annual statement of accounts. The Audit Committee

itself informs the Board of these findings.

The board of directors judges the performance of the auditors, among other parameters,

on criteria such as punctuality, efficiency in collaboration and clarity of statements.

9 Information policy

CREALOGIX Holding AG informs its shareholders and the capital markets openly,

currently and with the greatest possible transparency. The most important vehicles of

information are the Annual and Half-Year Report, the website (www.crealogix.com),

information to the media, the presentation of the balance sheet for journalists and

analysts as well as the annual general meeting. As an exchangelisted company

CREALOGIX Holding AG is obligated to publish information relevant to its stock price

(Ad hoc publication, Listing Rules). The Listing Rules of the SIX Swiss Exchange can be

found under www.six-exchange-regulation.com.

Inquiries about CREALOGIX can be addressed to the following persons responsible for

Investor Relations:

Bruno Richle

Chairman of the Board and CEO

T +41 58 404 8000, F +41 58 404 8090

[email protected]

Jürg A. Hässig

CFO

T +41 58 404 8000, F +41 58 404 8090

[email protected]

27


26

Share price development 1 July 2010 to 30 June 2011

Share capital in CHF

Symbols High Low Change in % to previous year

CLXN 110.00 57.00 38.00 (69.1%)

SPI (SXGE) 6 078.48 5 249.15 276.7 (5.10%)

Key figures – shares

Share capital in CHF 8 560 000

Total number of outstanding shares 1 070 000

of which publicly traded 331 082

in % 30.94%

Shareholders’ equity per share in CHF 53.5

Earnings per share in CHF, undiluted 4.41

Share price in CHF

30 June 2011 96.00

High (03 Mar 2011) 110.00

Low (12 Aug 2010) 57.00

Issue price (7 Sep 2000) 200.00

Market capitalisation in CHF million

30 June 2011 102.7

High (03 Mar 2011) 117.7

Low (06 Aug 2010) 61.0

Issue price (7 Sep 2000) 214.0

Market capitalisation (30 June 2011)

as % of revenue 194.4

as % of shareholders’ equity 179.9

Price earnings ratio (P / E ratio) 21.8

Trading volume in CHF million

1 Jul 2010 to 30 Jun 2011 6.8

SPI (SXGE)CLXN

105

100

95

90

85

80

75

70

65

60

55

50

Jul 10 Sep 10 Nov 10 Jan 11 Mär 11 Mai 11

Trading platform and ticker symbolsRegistered shares (at par value CHF 8) of CREALOGIX Holding AG have been listed on the SIX Swiss Exchange since 7 September 2000 under the identification num-ber 1 111 570.

Ticker symbols

Telekurs CLXN

Reuters CLXZn. S

Bloomberg CLXN SW

Dividend policy

The Board of Directors proposes to the General Meet-

ing of 2 November 2011 a distributon from surplus

capital paid-in of CHF 15 per share, totalling TCHF

16 050 on 9 November 2011. This distribution is tax

and withholding tax free to private shareholders and

comparable to a reduction of the face value of the

shares.

Company bylaws

The company bylaws can be accessed under:

www.crealogix.com.

SHARE INFORMATION


NOTES: DETAILS TO SHARE-BASED PAYMENTS

Employee Share Option Plans (I, Ia and II)

Share options are usually granted once a year. Each option entitles the holder to buy

one share in CREALOGIX Holding AG (CLXN) at the fixed exercise price.

The exercise prices for options under Option Plans I and Ia correspond to the closing

price of registered shares traded on the SIX Swiss exchange on the issue date. For op-

tions under Option Plan II, the exercise price is 20 percent higher than that of options

under Option Plan I.

Options under Option Plans I and Ia expire five years after the issue date. Options un-

der Option Plan II expire ten years and six months after the date of issue.

All share option allotments are subject to a vesting period of one year, during which

the options cannot be exercised. The vesting period for one quarter of a given allot-

ment expires at the end of one year, a further quarter is released at the end of two

years, and so on, until, at the end of four years, all options from a single allotment are

available for exercise. When employment is terminated, the options lapse a full six

months after the employee leaves the company, without compensation being paid for

options not exercised.

As of 2003, the taxation of Option Plan I was changed at the behest of the Zurich tax

authorities, so that options granted under Option Plan I only become taxable when

exercised. To take account of these changes, the former Option Plan I is now con-

ducted as Option Plan Ia, with a shorter term to maturity. Since 2003, allotments have

been made under Option Plan Ia only.

On 1 July 2005, employee share options under these option plans were granted for

the last time. The option plans will expire after 5 years, as set out under the policy.

The outstanding options are valid either until expiry, premature exercise or on loss.

Option Plan 3

On 1 July 2006, the board of directors implemented CREALOGIX Option Plan 3. The

board of directors can issue options once a year. One option gives the right to buy

one share of CREALOGIX Holding AG (CLXN) at the stated exercise price.

Under Option Plan 3, a maximum of 100 000 options can be issued over the entire

term. The options are granted to employees free of charge. The exercise price of the

options under Option Plan 3 corresponds to the average closing price of the

CREALOGIX share for the last 5 trading days before the issue of the options.

Options issued under Option Plan 3 can be exercised three years after the date of is-

sue until expiry; that is, a vesting period of 3 years exists for these options. All options

can be exercised on any trading day on the SIX Swiss exchange.

The exercise of options issued under Option Plan 3 requires an established employ-

ment status or membership of the board of directors of one of the CREALOGIX Group

companies. Six months after employment termination, all outstanding options lapse

without compensation for options not exercised. Unexercised options expire 5 years

after the issue date. Option plan 3 will lose its validity 5 years after authorisation by

the board of directors. All options issued before that date are still effective until their

expiry.

According to the decision made by the Zurich tax authorities on 10 November 2006,

the expected revenue from exercise of the options represents taxable income. How-

ever, granting of the options does not result in taxable income.

On 27 October 2008, share options of this share option plan were allotted for the last

time. The share option plan was terminated as stipulated in the policy after the five-

2928


year running period. The share options still outstanding retain their validity until the

final expiry or their earlier execution or termination.

The Board decided not to set up a new share option plan.

Share Plan 1

On 1 July 2006, the board of directors implemented the new CREALOGIX Share

Plan 1. The board of directors of CREALOGIX Holding AG offers share option plans,

at its own discretion, to selected members of staff and directors.

Each authorised employee is given the option of receiving locked shares of

CREALOGIX Holding AG (up to a maximum value of TCHF 50) instead of cash pay-

ment of their granted bonus. The sales price of an employee share is equivalent to

70 percent of the average closing price of the last five trading days on the SIX Swiss

exchange before the definitive share allotment.

Employee shares are subject to a vesting period of 3 years, during which they cannot

be exercised, pledged, nor transferred in any other way. After the vesting period, all

issued shares are available for exercise by the employee. Employee shares, for which

the vesting period has not yet expired at the time of employment termination from a

CREALOGIX company with domicile in Switzerland, remain subject to the applicable

vesting period. They remain the property of the former employee.

Because the participating employees and board of directors received the shares at a

discounted price, taxable income from dependent gainful employment must be

recognised. The amount of the taxable income is calculated as the difference be-

tween the tax value of a CREALOGIX share and the discounted issue price. Because

Share Plan 1 stipulates a three-year vesting period, a discount of approx. 6 percent

per vesting year is granted on the trading value of the share for the calculation of its

tax value.

A maximum of 100 000 CREALOGIX shares can be issued throughout the term of

Share Plan 1. Share Plan 1 expires five years after its adoption by the board of direc-

tors.

On 29 October 2010, 19497 options were granted at an exercise price of CHF 43.85.

The fair value per share was calculated as the difference between the average price

of the last five trading days before year-end and the issue date; this amounts to

CHF 18.79. Expected dividends were not taken into consideration because corporate

policy does not include dividend distributions.


Free share plan 2010

The Board of Directors introduced the CREALOGIX free share plan 2010 as at

31 October 2010. The right to participate in the free share plan extends to the

employees and members of the Board of Directors of the CREALOGIX Group deter-

mined by the Board of Directors at its own discretion.

A condition for the allocation of free shares under this plan is that (i) the employee/

member of the Board of Directors concerned must declare his willingness to accept,

on the basis of a separate agreement, a further vesting period of 3 years for the

employee shares in his possession which are still blocked under the terms of the

CREALOGIX share plan 1 of June 2006 even after the expiry of the vesting period

stipulated in that plan and (ii) that the employee/member of the Board of Directors

concerned must still be in an employment/board membership relationship for which

notice of termination has not been given upon the expiry of the further blocking

period.

For each CREALOGIX employee share on which a further vesting period of 3 years

has been imposed, the entitled employee/member of the Board of Directors will

receive one CREALOGIX free share on the expiry of the further vesting period and

subject to the condition stipulated above.

The additional limitation placed on the right to dispose of the CREALOGIX em-

ployee shares is 3 years (vesting period). During that vesting period, the CREALOGIX

employee shares may not be sold, pledged or otherwise transferred by the employee/

member of the Board of Directors concerned.

Not more than 50 000 shares may be issued under this free share plan 2010 during

its period of validity.

The Board of Directors will decide every year at its own discretion on the number of

CREALOGIX employee shares on which a further vesting period of 3 years may be

imposed in the year concerned. If the requests for allocation made by the partici-

pants in a particular year exceed the number of employee shares stipulated by the

Board of Directors with a further vesting period of 3 years, the allocation request of

each individual participant will be reduced by the proportion in which the allocation

requests exceed the number of shares to be issued.

The free share plan 2010 will lapse 5 years after it has been approved by the Board

of Directors. After that date, no further shares will be issued under this free share

plan 2010.

However, for all the shares issued prior to this expiry date, the rules of this free

share plan 2010 and of share plan 1 will continue to apply until the expiry of the

limitations on disposal imposed in the particular plan (or until the expiry of the

agreed additional vesting period for shares issued under share plan 1).

31


30

The following table provides an overview of all allotted employee share options:

30 June 2011 Plan No.

Allotment date Expiry date Exercise price No. of options allotted

II 07.09.2000 07.03.2011 240.00 35 104

I 03.01.2001 03.01.2006 86.00 424

II 03.01.2001 04.07.2011 103.00 2 184

II 02.04.2001 03.10.2011 75.00 3 648

I 02.07.2001 03.07.2006 64.00 3 288

II 02.07.2001 03.01.2012 76.80 37 832

II 01.10.2001 02.04.2012 48.00 808

I 02.01.2002 02.01.2007 47.00 84

II 02.01.2002 02.07.2012 56.40 2 000

I 01.07.2002 02.07.2007 32.80 11 316

II 01.07.2002 03.01.2013 39.35 45 628

Ia 03.01.2003 03.01.2008 30.00 1 000

Ia 03.07.2003 03.07.2008 46.00 28 172

Ia 01.07.2004 30.06.2009 50.90 20 370

Ia 03.01.2005 31.12.2009 47.00 48 172

Ia 01.07.2005 30.06.2010 69.50 54 108

3 30.11.2006 30.11.2011 95.40 12 663

3 31.10.2007 31.10.2012 82.40 18 860

3 27.10.2008 27.10.2013 69.30 14 582

Total Plan I 15 112

Total Plan II 127 204

Total Plan Ia 151 822

Total Plan 3 46 105

Total of all plans 340 243

On each allotment date, vesting periods of one, two, three and four years apply to

25 percent of the assigned employee options according to Option Plans I, Ia and II.

For Option Plan 3, the vesting period for the total allotment consists of 3 years.

Exciting learning on your travels

MOBILE LEARNING

MOBILE LEARNING

3233

The challengeBig bandwidths are seldom available for fast downloads of learning content on your travels. That is why it is preferable to download major learning modules via a powerful Internet line at home, so that learning can begin as soon as you are on your way.

The solutionThe CLX.MobilePlayer by CREALOGIX is the ideal solu-tion. It downloads the desired contents and stores them on the iPhone so that they are always available offline. The user downloads the learning app once only from the Apple Store and can then learn on his travels as often and for as long as he likes.

The contents are made available via the CLX.WBT-Tracker learning platform for learning without any limitations of time and place. User results are sent back to the learn-ing platform, where they can be evaluated./// www.crealogix.com/education

3535

Group Key Figures 36

Consolidated Balance Sheet 37

Consolidated Income Statement 38

Changes in Consolidated Equity 39

Consolidated Cash Flow Statement 40

Notes to Consolidated Financial Statements 44

Report of the Group Auditors 76

3435

CREALOGIX FINANCIAL STATEMENTS

FINANCIAL REPORT GROUP

KEY FIGURES

Amounts in thousands of CHF July – June 2010/2011

July – June 2009/2010

Revenue 52 843 52 495

% change 0.7 – 9.1

Operating result before interest, taxes, depreciation and amortisation (EBITDA)

6 391 4 993

in % of revenue 12.1 9.5

Operating profit (EBIT) 5 123 3 276


Consolidated profit 4 692 3 199


in % of shareholders’ equity 8.2 5.9

Net cash flow from operating activities 8 292 4 134


Cash flow from investing activities – 937 – 990

Depreciation / amortisation 1 268 1 717

Full-time employees 232.7 233.4

Full-time freelancers 23.2 21.3

Total full-time employees (incl. freelancers) 255.9 254.7

Revenue per full-time employee (incl. freelancers) 206 206

Personnel expense per full-time employee 140 138

Headcount on 30 June 236 265

Total full-time employees in June 220.6 243.5

Share Prices

High 110.00 69.95

Low 57.00 53.00

On 30 June 96.00 58.00

Market capitalisation (in millions)

High 117.7 74.8

Low 61.0 56.7

Market capitalisation on 30 June (in millions) 102.7 62.1


in % of shareholders’ equity 179.9 113.9

Basic earnings per share 4.411 3.040

Price-earnings ratio (P/E) 21.8 19.1

Shareholders’ equity per share 53.5 51.5

Price-book value 1.8 1.1

30 June 2011 30 June 2010

Total Assets 69 385 67 982

Total current assets 60 965 58 860

thereof: Cash, cash equivalents and marketable securities 46 509 42 273

Non-current assets 8 420 9 122

Liabilities 12 300 13 481

Shareholders’ equity 57 085 54 501

Equity ratio (in %) 82.3 80.2

37


36

CONSOLIDATED FINANCIAL STATEMENTS

Amounts in thousands of CHF Notes 30 June 2011 in % 30 June 2010 in %

A S S E T S

Currrent Assets

Cash and cash equivalents 6 39 765 34 484

Marketable securities 7 6 744 7 789

Trade receivables 8 5 837 9 499

Other receivables 9 2 816 2 976

Accrued income 257 310

Work in progress / inventory 10 5 546 3 802

Total Current Assets 60 965 87.9 58 860 86.6

Non-Current Assets

Financial assets 11 200 200

Property, plant and equipment 12 4 319 4 768

Intangible assets 13 668 831

Deferred tax assets 16 1 233 1 363

Asset from employer contribution reserve 17 2 000 1 960

Total Non-Current Assets 8 420 12.1 9 122 13.4

Total A S S E T S 69 385 100.0 67 982 100.0

L I A B I L I T I E S A N D S H A R E H O L D E R S’ E Q U I T Y

Current Liabilities

Trade and other short-term payables 743 1 948

Other short-term payables 1 879 1 189

Accrued liabilities 14 8 630 9 437

Current income tax liabilities 177 131

Total Current Liabilities 11 429 16.4 12 705 18.7

Non-Current Liabilities

Financial liabilities 15 0 181

Deferred tax liabilities 16 871 595

Total Non-Current Liabilities 871 1.3 776 1.1

Total Liabilities 12 300 17.7 13 481 19.8

Shareholders’ Equity

Share capital 18 8 560 8 560

Treasury shares 18 – 342 – 655

General 37 551 39 684

Other share premium 642 598

Share premium 38 193 40 282

Retained earnings 10 674 6 314

Total Shareholders’ Equity 57 085 82.3 54 501 80.2

Total L I A B I L I T I E S A N D S H A R E H O L D E R S’ E Q U I T Y

69 385 100.0 67 982 100.0

The notes on pages 44 to 74 are an integral part of these consolidated financial

statements.


GROUP INCOME STATEMENT

Amounts in thousands of CHF Notes July – June 2010/2011

in %

July – June 2009/2010

in %

Revenue 5 52 843 100.0 52 495 100.0

Cost of goods sold – 10 007 – 18.9 – 8 880 – 16.9

Change in inventory 1 624 3.1 – 457 – 0.9

Personnel expense 19 – 32 492 – 61.5 – 32 255 – 61.4

Depreciation expense 12 – 750 – 1.4 – 1 002 – 1.9

Amortisation expense 13 – 518 – 1.0 – 715 – 1.4

Marketing expense – 1 399 – 2.6 – 1 167 – 2.2

Rent, maintenance and repairs – 1 812 – 3.4 – 1 968 – 3.7

General and administration expenses – 2 366 – 4.6 – 2 775 – 5.4

Operating Profit 5 123 9.7 3 276 6.2

Result from divestments 118 0.2 0 0.0

Financial income 20 436 0.8 751 1.5

Financial expense 20 – 321 – 0.6 – 499 – 1.0

Financial Result 115 0.2 252 0.5

Earnings before Taxes 5 356 10.1 3 528 6.7

Income tax expense 16 – 664 – 1.2 – 329 – 0.6

Consolidated Earnings 4 692 8.9 3 199 6.1


statements.

39


38

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

Amounts in thousands of CHF

Share capital

Treasury shares

Share premium

Retained erarnings

Translation adjustments

Total Shareholders’

Equity

At 30 June 2009 8 560 – 2 119 40 195 3 876 – 198 50 314

Netting of Goodwill – 112 – 112

Translation differences – 451 – 451


Change in treasury shares 1 464 87 1 551

At 30 June 2010 8 560 – 655 40 282 6 963 – 649 54 501

Netting of Goodwill – 800 – 800

Goodwill netted at acquisition date

521 521

Distribution of share premium

– 2 133 – 2 133

Translation differences – 53 – 53


Change in treasury shares 313 44 357

At 30 June 2011 8 560 – 342 38 193 11 376 – 702 57 085


statements.


GROUP CASH FLOW STATEMENT

Amounts in thousands of CHF Notes

July – June 2010/2011

July – June 2009/2010


Income tax expense 16 664 329

Depreciation / amortisation 12/13 1 268 1 717

Impairment of trade receivables 73 – 22

Defined-benefit plans 17 – 40 – 48

Gain on sale of property, plant and equipment – 45 13

Financial result 20 – 115 – 252

Result from divestments – 118 0

Trade and other receivables 4 050 – 2 000

Work in progress / inventory – 1 787 588

Other financial assets 1 246 2 344

Trade and other payables, incl. tax liabilities – 1 492 – 460

Gross cash flow from operating activities 8 396 5 408

Interest received 210 138

Interest paid – 30 – 23

Tax received 207 73

Tax paid – 491 – 1 462

Net cash flow from operating activities 8 292 4 134

Cash flow from investing activities

Purchase of property and equipment 12 – 577 – 513

Proceeds from sale of property and equipment 235 54

Purchase of intangible assets 13 – 380 – 160

Disposal of subsidiaries, net of cash disposed – 215 0

Acquisition of subsidiaries / minority interest, net of cash acquired 0 29

Allocation to employer contribution reserve 17 0 – 400

Cash flow from investing activities – 937 – 990

Free Cash Flow 7 355 3 144

Cash flow from financing activities

Repayment of loans 1 3

Distribution of share premium – 2 133 0

Purchase / sale of treasury shares – net 357 1 551

Cash flow from financing activities – 1 775 1 554

Net change in cash and cash equivalents 5 580 4 698

Cash and cash equivalents at beginning of period 34 484 30 150

Net foreign exchange difference – 299 – 364

Cash and cash equivalents at end of period 39 765 34 484

The notes on pages 44 to 74 are an integral part of these consolidated financial statements.

41

40


The same service via every channel

USER EXPERIENCE

The challengeCompanies contact their clients through an increasingly wide range of channels – in particular via mobile appliances such as mobile phones or tablet PCs. For banks, these touch points range from cash dispensers via an information panel in the branch to e-banking applications for smartphones. How can we make it as easy as possible for clients to work with familiar processes and interfaces across a whole range of appliances?

USER EXPERIENCE

4243

The solutionIntuitive user interfaces which match every channel. These ensure ease of operation and an outstanding user experience. The user finds a similar navigation procedure on every channel and a design implemented on the basis of uniform visual criteria. To develop a user experience, CREALOGIX supplies a method and a comprehensive service offering with CLX.Experience. This contains various modules – ranging from user ana-lysis, development of user scenarios and the derivation of a concept via design and its visual directives – to implementation of prototypes in ready-to-run software./// www.crealogix.com/ux


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 Basic Information

The CREALOGIX Group is a leading and independent provider of software and hard-

ware related products. Its core business is focused on E-Finance, E-Business, Educa-

tion and Transport & Logistics in Switzerland and Europe.

The CREALOGIX Group is a stock corporation headquartered in Switzerland. The

address of their registered office is Baslerstrasse 60, CH-8048 Zurich.

The Group’s nominal shares are traded on the SIX Swiss Exchange under Swiss security

number 1 111 570.

The consolidated financial statements were approved for issue by the Board of

Directors on 8 September 2011 and proposed for adoption at the annual General

Shareholder‘s Meeting on 2 November 2011.

All figures in the annual financial statements are, if not mentioned otherwise, in thou-

sands of Swiss francs (TCHF).

The following foreign exchange rates were applied:

Year – end rates (Balance Sheet) Average rates (P&L statement)

30 June 2011 30 June 2010 July – June 2010/2011

July – June 2009/2010

EUR 1.23 1.31 1.31 1.49

CAD 0.88 1.01 0.95 1.00

USD 0.84 1.07 0.96 1.06

As of 30 June 2011 the following subsidiaries were fully consolidated:

Company Activity Capital Interest held

Proportion of voting

rights

CREALOGIX E-Business AG, Bubikon, Switzerland

Consultancy and services in information technology and data communication

CHF 100 000 100% 100%

CREALOGIX E-Banking AG, Zurich, Switzerland


CHF 100 000 100% 100%

CREALOGIX E-Banking AG, Zuchwil, Switzerland

Consultancy and services in informa-tion technology and data communica-tion. Development / trading of software

CHF 200 000 100% 100%

CREALOGIX E-Payment AG, Hünenberg, Switzerland

Services in information technology, development of software, trading of hardware and software

CHF 550 000 100% 100%

CREALOGIX Transport & Logistics AG, Zurich, Switzerland

Consultancy and services in the area for solutions in the transport and logistics industrie

CHF 100 000 100% 100%

CREALOGIX ERP AG, Villingen, Germany Development / trading of software EUR 50 000 100% 100%

CREALOGIX AG, Frankfurt, Germany(from 5.9.2011 Stuttgart)


EUR 100 000 100% 100%

CREALOGIX Corp., Toronto, Canada Consultancy and services in information technology and data communication

CAD 100 000 100% 100%

Changes in equity interest from the previous year are defi ned in Note 23.

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44

2 Summary of Significant Accounting and Valuation Policies

The significant accounting and valuation policies applied in the preparation of these

consolidated financial statements are set out below. These policies have been consis-

tently applied to all the years presented, unless otherwise stated.

2.1 Basis of PreparationThe consolidated financial statements of CREALOGIX Holding AG have been prepared

in accordance with Swiss GAAP FER, Swiss Law and the requirements of SIX Swiss Ex-

change. The consolidated financial statements have been prepared under the historical

cost accounting convention. The preparation of financial statements in agreement

with Swiss GAAP FER requires estimates. Further, the application of groupwide ac-

counting and valutation methods requires assessments by the management. Areas

with more room for judgement and higher complexity or areas, where assumptions

and estimates are crucial for the consolidated closing, are listed in note 4.

2.2 Consolidationa) Subsidiaries

Subsidiaries consist of all entities over which the Group has the power to govern the

financial and operating policies; generally the Group would also have acquired more

than one-half of the entity’s voting rights. When assessing whether or not the Group

controls another entity, the existence and effect of potential voting rights that are cur-

rently exercisable or convertible are considered. Subsidiaries are fully consolidated

once control is transferred to the Group; however, they are deconsolidated as soon as

that control no longer exists.

The purchase method of accounting is used to account for subsidiaries that have been

acquired by the Group. The cost of an acquisition is measured as the aggregate of the

fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and

equity instruments issued by the acquirer, plus any costs directly attributable to the

acquisition. Identifiable assets, liabilities and contingent liabilities assumed in a busi-

ness combination are initially measured at fair value on the acquisition date, regard-

less of the extent of any minority interest. The excess of the cost of the acquisition

over the Group‘s interest in the net fair value of the identifiable assets, liabilities and

contingent liabilities is recorded as goodwill and netted with the equity.

If the acquired interest in the net fair value of the identifiable assets, liabilities and

contingent liabilities exceeds the cost of the acquisition, the difference is immediately

recognised in profit or loss.

Intercompany transactions, balances and unrealised gains on transactions between

Group companies are eliminated. Unrealised losses are also eliminated unless the

transaction shows evidence of an impairment of the transferred asset. Accounting and

valuation policies of subsidiaries have been revised where necessary in order to ensure

consistency with the policies adopted by the Group.


b) Associates

Associates are all entities over which the Group has significant influence but not con-

trol, and generally has also acquired 20 percent to 50 percent of the voting rights.

Investments in associates are accounted for under the equity method and are initially

recognised at cost.

The Group‘s share of the profits and losses of associates is recognised in the income

statement on acquisition, and its share of changes in reserves is recognised in the

reserves. The cumulative postacquisition movements were adjusted to the carrying

amount of the investment. When the Group‘s share of losses of an associate equals or

exceeds its interest in the associate (including any unsecured receivables), the Group

does not recognise any further losses at the expense of the Group equity unless the

minority has a corresponding liability and is able to offset these losses.

Unrealised gains on transactions between the Group and its associates are eliminated

to the extent of the Group‘s interest in the associates. Unrealised losses are also elimi-

nated unless the transaction shows evidence of impairment of the transferred asset.

Accounting and valuation policies of associates have been revised where necessary to

ensure consistency with the policies adopted by the Group.

2.3 Segment ReportingThe Group is only active in one segment. Due to the convergence of the segments

reported in the past, the organisational modifications and the development of the

markets, the activities of the Group no longer differ significantly.

The informaton with regard to the income statement in the notes contains details to

the sales figres, assets and capital expenditure by geographical markets as well as

details to the sales categories.

2.4 Foreign Currency Translationa) Functional Currency and Reporting Currency

Items included in the financial statements for each of the Group‘s entities are measured

using the currency of the primary economic environment in which the entity operates

(functional currency).

The consolidated financial statements are reported in Swiss francs (CHF), the Company’s

reporting currency. In tables money values are presented in thousands CHF, if not

mentioned otherwise.

b) Transactions and Balances

Foreign currency transactions are translated into the functional currency at the average

monthly exchange rate prevailing at the month of the transaction date. Gains and

losses resulting from the execution of such transactions as well as from the translation

of foreign currency denominated assets and liabilities, are recorded in the income

statement.

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46

c) Group Companies

The results and financial position of all the Group entities (none of which have the

currency of a hyperinflationary economy) that have a functional currency differing

from the reporting currency are translated into the reporting currency as follows:

– assets and liabilities in each balance sheet are translated at the closing rate on the

relevant balance sheet date;

– income and expenses in each income statement are translated at average exchange

rates for the year under review; and

– all resulting exchange rate differences are recognised as a separate component of

equity.

On consolidation, exchange differences arising on monetary items forming part of

a reporting entity’s net investment in a foreign operation and on other currency in-

struments designated as hedges of such investments, are recognised in shareholders’

equity with no impact on earnings.

With the divestment of a foreign activity, such exchange differences are charged

through the income statement as part of the gain/loss on the sale. Adjustments to

the fair value that were booked upon acquisition of a foreign subsidiary are translated

as assets and liabilites at the closing rate.

2.5 Cash and Cash EquivalentsCash and cash equivalents comprise cash on hand, demand deposits, postal and bank

accounts, and any short-term, highly liquid investments that are readily convertible to

known amounts of cash and which are subject to an insignificant risk of change in

value (e.g. short term maturity of three months or less). Bank overdrafts are disclosed

in the balance sheet under current liabilities as bank payables.

Marketable securities under current assts, are valued at actual value. Should no such

value be available, they are valued at cost less value adjustment.

Marketable securities vailue at fair value are shown as part of the net working capital.

Changes to the fair values of such financial assets are shown in the income statement

under the position “financial result”.

2.6 Trade and Other Current Receivables Trade receivables are stated at nominal value less an allowance for doubtful accounts.

An impairment is made for trade receivables when the Group has objective evidence

that it is not in a position to realise the full amount of the claim.

No general value adjustments are booked.


2.7 Work in Progress, Inventories Work in progress (projects) is recognised using the valuation method outlined in Note

2.18. Inventories are measured at the lower of cost and net realisable value. Cost

includes all purchase costs, costs of conversion and all other costs incurred in bringing

the inventories to their present location and condition, but excluding any borrowing

costs. The net realisable value is the estimated selling price in the ordinary course of

business less the estimated costs of completion and the estimated costs necessary to

make the sale.

Costs are measured using the weighted average method.

Prepayments from customers on work in progress are shown in the position accrued

liabilities under income received in advance.

Cash discounts are shown as reduction to the cost value.

2.8 Financial AssetsFinancial assets are valued at cost less value adjustments.

2.9 Property, Plant and Equipment Items of property, plant and equipment are stated at historical cost less any accumu-

lated depreciation. Historical cost includes the purchase price and all expenditures

directly attributable to bringing the asset to the location and condition necessary for it

to be capable of operating in the manner intended by management.

Subsequent costs are included in the asset‘s carrying amount or recognised as separate

assets, as appropriate, only when it is probable that future economic benefits associated

with the item will flow to the Group and the cost of them can be reliably measured.

All other repair and maintenance costs are reported in the income statement in the

financial period in which they were incurred.

Depreciation/amortisation on capital assets is calculated on a straight-line basis over

the useful lives of the assets, as follows:

Years

Furniture and fixed installations 10

IT and communications systems 2

Other office equipment 5

Vehicles 5

Real estate 40

The assets residual values, useful lives and methods of depreciation are reviewed, and

adjusted if necessary, at each financial year-end.

Gains and losses arising from the disposal of property, plant and equipment are deter-

mined as the difference between the net proceeds and the carrying amount of the

item and are included in profit or loss.

49


48

2.10 Intangible AssetsAmortisation on intangible assets is calculated on a straight-line basis over the useful

lives of the assets, as follows:

Years

Software licences acquired 4

Capitalised software development costs 5

Trademarks and licences 5

a) Trademarks and Licenses

Trademarks and licenses are disclosed at historical cost. Trademarks and licenses have

clearly defined useful lives and are valued at cost less accumulated amortisation.

b) Software

The cost of licenses acquired for computer software comprises the purchase price and

any directly attributable costs of preparing the asset for its intended use.

Costs arising from the development and maintenance of computer software are recog-

nised as expenses in the income statement.

Costs for internally developed software are capitalised, provided the following conditions

are met:

– the expenditures directly attributable to the software during its development can be

reliably measured;

– the costs can be, and are, controlled by the Group, and

– the asset will generate probable future economic benefi ts in excess of the costs over

an extended period of time. Costs include salary costs for the software developers

and a reasonable portion of the relevant overhead expenses.

2.11 Impairment of Assets Assets are tested annually for impairment. Assets subject to depreciation/amortisation

are reviewed for impairment whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable. An impairment loss is recognised as

the amount by which the asset‘s carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of an asset‘s fair value less disposal costs and its

value in use.

2.12 Deferred Taxes Deferred taxes are provided, using the liability method, on all temporary differences

arising between the tax bases of assets and liabilities and their carrying amounts in the

Swiss GAAP FER financial statements. Deferred taxes are determined using tax rates

(and laws) that have been enacted or substantially enacted by the balance sheet date

and are expected to apply when the related deferred tax asset is realised or the de-

ferred tax liability is settled.


Deferred tax assets are recognised to the extent that it is probable that future taxable

profit will be available against which the temporary differences can be utilized.

Deferred tax liabilities are provided on temporary differences arising on investments in

subsidiaries and associates, except where the timing of the reversal of the temporary

difference cannot be controlled by the Group and it is probable that the temporary

difference will not reverse in the foreseeable future. Current and deferred income tax

assets and liabilities are offset when the income taxes are levied by the same taxation

authority and when there is a legally enforceable right to offset them.

A deferred tax liability is only recognised on these amounts if the sale of these affi-

liates is foreseeable.

2.13 LiabilitiesLiabilities are recorded at nominal value.

Loan liabilities are classified as short-term liabilities unless the Group has the uncondi-

tional right to postpone settlement of the debt until 12 months after the balance

sheet date or later.

2.14 Leasesclassified as operating leases. Payments in connection with an operation lease (net of

reductions conceeded by the lessor) are recognised in income on a straight-line basis

over the term of the lease.

2.15 Employee Benefit Plans a) Pension liabilities

The Group operates a number of pension plans that qualify as defined benefit plans,

the assets of which are held and managed autonomously by separate, legally indepen-

dent foundations.

The pension fund organisations are financed through employee and employer contri-

butions of the affiliated group companies with respect to the recommendation of

inde pendent, qualified actuary.

The contributions are accrued for the period and recorded as personnel costs, as well

as the movement of the recorded economic benefit and liability respectively and the

movement of the employer’s contribution reserves.

In the case of a conditional waiver of usage by the Group to the pension fund, the

asset is value-adjusted.

51


50

b) Share-based payments

At the date of exercise, the difference between the share price and the strike price of

the option, i.e. the intrinsic value of the option, is multiplied with the number of op-

tions exercised and recorded under personnel cost.

To counteract unscheduled fluctuations in expense through the exercise of options an

accrual is formed based on the options available in cash and exercisable as of the bal-

ance sheet date multiplied with the intrinsic value. The movement of the accrual in

the reporting period is shown as personnel costs.

c) Profit sharing and bonus plans

For bonuses and profit sharing payments, a liability and an expense is recognised based

on net operating profit (EBIT). The Group recognises a liability in cases of contractual

obligations or where a de facto obligation exists due to past business practices.

2.16 ProvisionsProvisions are made to cover guarantee, restructuring, litigation and other costs that

are uncertain with respect to amount and date of occurrence. Provisions are recognised

if the Group is subject to present legal or de facto obligations that resulted from a past

event, payment is probable, and the amount can be reliably estimated. Provisions are

recorded at discounted present value if their expected cash outflow is past one year

after the balance sheet date.

Restructuring provisions include payments for pre-term lease cancellations and em-

ployee severance payments.

2.17 Share Capital Common shares are classified as equity. Costs directly attributable to the issuance of new

shares or options are disclosed in equity, net of tax, as a deduction from the proceeds

of the issue. Costs directly attributable to the issuance of new shares or incurred di-

rectly through the acquisition of a company are included in the acquisition cost as part

of the consideration paid for the acquisition.

When any Group company purchases the Company’s equity (treasury shares), the con-

sideration paid, including any directly attributable additional costs (net of taxes), is

deducted from the shareholders’ equity in the Company until the shares are cancelled,

reissued or disposed of. When such shares are subsequently reissued or sold, any con-

sideration received, net of any directly attributable incremental transaction costs and

the related income tax, is recognized in the shareholders’ equity of the Company.


2.18 Revenue RecognitionA. Sales

CREALOGIX generates income primarily from services and licenses. The Company

focuses on the design and production of highly sophisticated applications in the

e-business and ERP segments. These applications are developed and supported

according to the “plan-build-run” model.

Revenue is recognised on delivery of the goods and, where contractually stipulated,

on acceptance from the buyer. Revenue from services is recognised by percentage of

completion. Revenue is usually recognised in the income statement on delivery, with

the exception of major projects not completed until after the balance sheet date. In

such cases, revenue is recognised by the percent-age-of-completion method, report-

ing the percentage completed as of the balance sheet date.

Revenues are only realised if the client is deemed “creditworthy”.

Each project is recognised individually. CREALOGIX distinguishes between two differ-

ent types of contracts:

– fixed-price contracts

– contracts based on hourly work rates

a) Recognition of revenue for fixed-price contracts

As soon as reliable estimates can be made regarding the profitability of an assignment,

the revenue resulting from the transaction is recognised by the percentage-of-completion

method, recording the percentage completed as of the balance sheet date. The percent-

age of completion is measured as the ratio of the number of hours of work performed

to date to the total number of hours of work according to the contract. The profitability

of the transaction can be reliably estimated when all of the following criteria are met:

– he amount of revenue expected from the order can be reliably measured;

– it is probable that the economic benefits associated with the transaction will flow

to the Company;

– the stage of completion of the transaction at the balance sheet date can be reliably

measured;

– the costs incurred for the transaction and the costs to complete the transaction can

be reliably measured

If no reliable estimates on the outcome of a project can be made:

– revenue is recognised only to the extent of the expenses recognised that are recov-

erable;

– these expenses are recognized as expenses in the period in which they were in-

curred.

For each contract not completed at the end of the year, future estimated expenses are

set against the corresponding future revenues.

Should the costs exceed the revenues, the expected loss is accrued.

b) Recognition of revenue for contracts based on hourly work rates

For this type of contract, CREALOGIX receives an agreed-upon fixed fee per hour of

work performed. Ideally, this fee should cover all costs.

Revenue from such transactions is posted with reference to the number of hours of

work performed as at the balance sheet date. The total number of hours of work per-

formed is billed on a monthly basis.

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52

c) User fees

Revenue from user fees is recognised on an accrual basis according to the economic

substance of the relevant agreements.

B. Other operating income

This position comprises capitalised software development costs and other operating

revenue, which cannot be assigned to sales

2.19 Interest Income and Expensea) Interest income and expense

Both interest income and expenses incurred from interest-bearing assets and liabilities,

including interest paid on trade assets, are included in this item. If the value of a re-

ceivable declines, the Group writes down the carrying value to the recoverable amount

(i.e. the sum of expected future payment streams discounted at the initial effective in-

terest rate) and releases the interest income over the corresponding period.

Interest income from impaired receivables is recognised, depending on the circum-

stances, when payment is received or costs are incurred.

b) Net income/expense – trade assets

Realised and unrealised gains and losses from trade assets are recognised at the actual

profit realised, which is based on the market price at the balance sheet date.

c) Other financial income/expenses

Other financial income and other financial expenses consist of all amounts that are not

interest or trading income/expenses. Included in this category is dividend income.

Dividend income is recognised when the right to receive payment is established.

2.20 Dividend DistributionsDividend distributions to the Company’s shareholders are recognised as a liability in

the period in which the dividends are approved.

3 Internal Controlling System and Risk Management

For several years, the Group has operated an internal control system (IKS) with the

objective of ensuring the effectiveness and the efficiency of operations, the reliability

of financial reporting and adherence to the law. In the application of the regulation of

the Swiss Code of Obligation, it was integrated, documented and applied in the con-

trolling and reporting process.

The risk management process is monitored by the CLX.Risk-Management-Concept.

With this all business risks are identified, but with focus on risks that could have

a material impact on the financial statements. Such risks were identified and quantified

in workshops and brought to the attention of the Executive Group Management and

the Board of Directors and discussed there. The risk management process is repeated in

regular intervals, at least once a year.

3.1 Financial Risk ManagementThe fair values of financial assets and liabilities essentially correspond to their carrying

values.


The nature of the Group’s activities causes exposure to various financial risks: market

risk (including currency risk, interest rate risk and price risk), credit risk, and liquidity

risk. The comprehensive Group risk-management system focuses on the unpredictability

of financial market developments and aims at minimising potential negative impacts

on the Group’s financial position. The Group is able to use derivative financial instru-

ments to hedge against certain risks.

Risk management is conducted by the corporate (Group) Finance Department in

accordance with guidelines adopted by the Board of Directors. The Group Finance

Department identifies, assesses and hedges against financial risks in close cooperation

with the Group’s operating units. Thereby financial risks (including concentration risks)

are quantified by means of scenario planning and compared with the risk competence

and risk tendency of the Group.

Financial risk management remains unchanged to the prior year.

3.2 Financial Risk Factors a) Market risks

i) Foreign exchange risks

The Group operates internationally and is consequently exposed to foreign exchange

risks arising from fluctuations in the exchange rates of various foreign currencies, pri-

marily the Euro. Foreign exchange risks arise from anticipated future transactions,

recognised assets and liabilities, as well as net investments in foreign operations.

Foreign exchange risks arise when future commercial transactions and recognised

assets and liabilities are denominated in a currency other than the entity’s functional

currency. To hedge against risks from anticipated future transactions and recognised

assets and liabilities, futures contracts can be finalised.

The Group holds interests in foreign operations whose net assets are subject to risks

from exchange rate fluctuations. Foreign exchange risks of the net assets of foreign

business operations are partially minimised at Group level due to the risk assessment

system. However, the risk is reduced primarily through the direct settlement of the

cash flow in foreign currencies.

ii) Interest rate risks

Since the Group has interest-bearing assets, interest income is dependent on the

movement of market interest rates. On the balance sheet, this affects cash and cash

equivalents, securities, financial assets, as well as financial liabilities.

Financial assets with variable interest rates expose the Group to cash flow risks, and

assets with fixed interest rates subject the Group to fair value risks.

The Group analyses the interest rate risk on a regular basis by estimating the future

development of the fixed and variable interest rates and regrouping the financial assets

accordingly.

iii) Price risks

The Group is subject to risks arising from fluctuations in the market prices of securities

(recognised at fair value through profit or loss) and affects this balance sheet position.

Investments in listed securities with excellent ratings are managed according to Group

guidelines and are monitored through continuous performance analyses.

The Group diversifies its investments by investing in various products and at various

institutions.

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54

The Group is not exposed to any significant commodity risks with respect to raw mate-

rials or any substantial prepayment risks.

b) Credit risks

Basic principles are followed by the Group that ensure that transactions are only con-

ducted with customers having an acceptable credit history. Investments in cash and

cash equivalents as well as transactions involving financial derivatives or cash are only

carried out with prime financial institutions. The maximum default risk is limited

mainly to the book values of the corresponding financial assets.

c) Liquidity risks

Liquidity management involves maintaining sufficient reserves of cash, cash equivalents,

and marketable securities, the possibility of financing through adequate available credit

lines, and the ability to issue capital stock (authorised capital stock with 300 000

registered shares). The central finance department bases its liquidity management on

contractually fixed payment terms as well as cautious estimates regarding expected

deferments. There is no concentration risk with respect to liquidity.

3.3 Capital Resource ManagementThe objectives of capital resource management are as follows:

– to ensure the Group’s operation as a going concern

– an adequate yield on equity.

For implementation purposes, equity is considered in relation to risk, and adjustments

are made if necessary. These adjustments are the basis for dividend policies, repayment

of capital, increases in capital, or the sale of assets for subsequent debt repayments.

Capital is managed on the basis of the equity ratio, which should amount to at least 30

percent. As per 30 June 2011, the equity ratio came to 83.3 percent (previous year:

80.2 percent). The increase in the equity ratio is due to a greater reduction on a per-

centage basis of the balance sheet total as compared to equity.

The Group has no obligations to third parties regarding the maintenance of the equity

ratio (covenants).

Capital resource management remains unchanged from the prior year.


4 Critical Accounting Estimates and Assumptions

The Group makes estimates and assumptions with respect to future developments.

Naturally, the actual subsequent circumstances rarely match these estimates.

All estimates and assessments are continually revised and are based on past experience

as well as on other factors, including expectations of future events deemed reasonable

under the given circumstances. Those estimates and assumptions entailing significant

risks in the form of substantial adjustments to the carrying value of assets and liabilities

during the following financial year are discussed below.

a) Revenue recognition

According to Note 2.18, service revenues are recognised according to the degree of

completion at the balance sheet date.

Remaining expenses up to completion, and thus the degree of completion, are esti-

mated as accurately as possible. If actual expenses were to differ significantly from

these estimates, the differences would require recognition in subsequent accounting

periods.

b) Capitalisation of tax losses

The amount of the capitalised deferred tax assets resulting from loss carryforwards is

estimated on the basis of the future taxable profit of the respective Group entity based

on budget calculations. Should the entities develop differently than expected, the impact

will be on future tax expenses.

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56

Segment Information

5.1 Geographical SegmentsThe Group’s main activity is in two geographical Segments: Switzerland, the home

country of the Group, where also the main activities take place, and in Europe.

Revenue July – June 2010/2011

July – June 2009/2010

Switzerland 46 672 43 444

Europe 5 723 8 711

Other countries 448 340

Total Group 52 843 52 495

Sales are assigned to the country in which the client is domiciled.

5.2 Revenue by Categories

Revenue July – June 2010/2011

July – June 2009/2010

Net sales from services 30 921 30 975

Net sales of goods 8 737 8 241

Net revenue from licensing fees 12 818 13 072

Total Sales 52 476 52 288

Other operating revenues 367 207

Total Revenue 52 843 52 495

Sales from such fixed-price contracts in the current year amounted to TCHF 15 878

(previous year: TCHF 14 863)

6 Cash and Cash Equivalents

Cash and Cash Equivalents 30 June 2011 30 June 2010

Cash on hand and bank accounts 37 885 34 055

Short-term investments 1 880 429

Total Cash and Cash Equivalents 39 765 34 484


7 Securities

Marketable Securities 30 June 2011 30 June 2010

Obligations 3 452 3 609

Shares 1 300 997

Property / alternative investments 1 992 3 183

Total Securities 6 744 7 789

8 Trade Receivables

Trade Receivables 30 June 2011 30 June 2010

Current 5 152 7 925

Overdue 1 – 30 days 221 1 139

Overdue 31 – 90 days 319 325

Overdue more than 90 days 214 167

Total Trade Receivables 5 906 9 556

Less: provision for value adjustment trade receivables – 69 – 57

Net Trade Receivables 5 837 9 499

Allowance for Doubtful Accounts July – June 2010/2011

July – June 2009/2010

At beginning of period – 57 – 87

Change in scope of consolidation 33 0

Allowance for doubtful accounts – 68 – 72

Use of allowance for doubtful accounts 24 33

Write-off of allowance for doubtful accounts 0 63

Translation differences – 1 6

At end of period – 69 – 57

Carrying values of trade receivables are denominated in the following currencies:

Currencies of Book Values of Trade Receivables 30 June 2011 30 June 2010

Swiss franc 5 484 7 186

EURO 422 2 326

Other currencies 0 44

5458

59


58

As the Group has a broad international client base, there is no concentration of credit

risks with respect to trade receivables.

The amounts on the balance sheet are not secured. The maximum credit default risk

corresponds to the stated carrying values.

During the business year, the Group recognised a net expense of TCHF 68 (previous

year: TCHF 9) on its allowance für doubtful debts. The movement is recorded under

“general and administration expenses” in the income statement.

9 Other Current Receivables

Other Current Receivables 30 June 2011 30 June 2010

Tax receivable 621 574

Other third-party receivables 2 044 1 981

Prepaid expenses 151 421

Total other Current Receivables 2 816 2 976

10 Work in Progress/Inventories

Work in Progress / Inventory 30 June 2011 30 June 2010

Work in progress (projects) 2 936 2 816

Inventory 2 610 986

Total Work in Progress / Inventory 5 546 3 802

Work in progress (projects) is accounted for under the valuation method described in

Note 2.18.

Inventories are measured at cost. The cost of inventories (purchase price, conversion

costs, and other costs incurred in bringing the inventories to their present location) is

disclosed as an expense in the amount of TCHF 3932 (previous year: TCHF 3777) under

cost of goods sold. Inventories comprise mainly trading goods (scanner pen and slip

scanner).

11 Financial Assets

Financial Assets Term Interest Rate Security 30 June 2011 30 June 2010

Loans to related parties indefinite 2.250% / 2.375%

no 200 200

Total financial Assets 200 200


12 Property, Plant and Equipment

July – June 2009/2010

Furniture Fixed Installations

Office Equipment

Vehicles Real Estate1) Total

Cost

At 1 July 2009 1 730 1 525 2 470 1 125 2 650 9 500

Exchange adjustments – 12 0 – 18 – 15 0 – 45

Acquisition of subsidiaries 0 16 635 19 0 670

Additions 11 13 225 264 0 513

Disposals 0 0 0 – 213 0 – 213

Elimination of property, plant and equipment no longer in use

– 100 0 – 39 0 0 – 139

Effect of movements in foreign exchange

0 0 – 2 0 0 – 2

At 30 June 2010 1 629 1 554 3 271 1 180 2 650 10 284

Accumulated Depreciation

At 1 July 2009 843 514 2 082 519 223 4 181


Acquisition of subsidiaries 0 6 630 11 0 647

Depreciation for the year 213 118 347 252 72 1 002

Disposals 0 0 0 – 146 0 – 146


– 100 0 – 39 0 0 – 139


– 2 0 – 3 0 0 – 5

At 30 June 2010 949 638 3 004 630 295 5 516

Net Book Values

At 1 July 2009 887 1 011 388 606 2 427 5 319

At 30 June 2010 680 916 267 550 2 355 4 768

Fire insurance value of fixed assets

30 June 2010 8 108

attributable to buildings 1 748

1) Real Estate represents an operationally used condominium in the canton Zug.

61


60

July – June 2010/2011

Furniture Fixed Installations

Office Equipment

Vehicles Real Estate1) Total

Cost

At 1 July 2010 1 629 1 554 3 271 1 180 2 650 10 284


Divestment of subsidiaries – 64 – 3 – 103 – 96 0 – 266

Additions 109 60 220 188 0 577

Disposals – 13 0 – 30 – 439 0 – 482


– 194 0 – 1 846 – 84 0 – 2 124


5 0 7 7 0 19

At 30 June 2011 1 467 1 611 1 511 750 2 650 7 989

Accumulated Depreciation

At 1 July 2010 949 638 3 004 630 295 5 516


Divestment of subsidiaries – 43 – 2 – 80 – 55 0 – 180

Depreciation for the year 151 123 209 195 72 750

Disposals – 4 0 – 29 – 258 0 – 291


– 194 0 – 1 846 – 84 0 – 2 124


3 0 5 3 0 11

At 30 June 2011 859 759 1 257 428 367 3 670

Net Book Values

At 1 July 2010 680 916 267 550 2 355 4 768

At 30 June 2011 608 852 254 322 2 283 4 319

Fire insurance value of fixed assets

30 June 2011 8 211

attributable to buildings 1 449

1) Real Estate represents an operationally used condominium in the canton Zug.


13 Intangible Assets

July – June 2009/2010

Software Licenses

Other1) Total

Cost

At 1 July 2009 1 117 4 607 5 724

Exchange adjustments 0 – 12 – 12

Additions 160 0 160

Effect of movements in foreign exchange 0 0 0

At 30 June 2010 1 277 4 595 5 872

Accumulated Amortisation

At 1 July 2009 752 3 580 4 332


Amortisation for the year 171 544 715

Effect of movements in foreign exchange 0 – 3 – 3

At 30 June 2010 923 4 118 5 041

Net Book Values

At 1 July 2009 365 1 027 1 392

At 30 June 2010 354 477 831

1) Other intangible assets include capitalised software development costs, trademark/licences and service/ production contracts, which were acquired from business acquisitions. These assets have definable useful lives over which they are amortised, until 30 June 2011 at the latest.

63


62

July – June 2010/2011

Software Licenses

Other1) Total

Cost

At 1 July 2010 1 277 4 595 5 872


Divestment of subsidiaries 0 – 74 – 74

Additions 380 0 380

Elimination of intangible assets no longer in use – 557 0 – 557


At 30 June 2011 1 100 4 522 5 622

Accumulated Amortisation

At 1 July 2010 923 4 118 5 041


Divestment of subsidiaries 0 – 47 – 47

Amortisation for the year 202 316 518

Elimination of intangible assets no longer in use – 557 0 – 557


At 30 June 2011 568 4 386 4 954

Net Book Values

At 1 July 2010 354 477 831

At 30 June 2011 532 136 668

1) Other intangible assets include capitalised software development costs, trademark/licences and service/ production contracts, which were acquired from business acquisitions. These assets have definable useful lives over which they are amortised, until 30 June 2011 at the latest.


Goodwill

Goodwill from acquisition, is netted with the equity at acquisition date or at first-time

adoption of Swiss GAAP FER. The effect of a theoretical capitalisation and a planned

amortisation is shown below:

30 June 2011 30 June 2010

Net result, as reported 4 692 3 199

Planned amortisations of goodwill (5 years) – 798 – 1 313

Impairment 0 0

Portion of netted goodwill at result from divestment 0 0

Net result with capitalised goodwill on 30 June 3 894 1 886

Cost value of goodwill on 1 Juli 16 561 16 469

Additions / disposals 279 92

Cost value of goodwill on 30 June 16 840 16 561

Value adjustments on 1 July – 15 856 – 14 543

Planned amortisations – 798 – 1 313

Impairment 0 0

Disposals 410 0

Value adjustments on 30 June – 16 244 – 15 856

Net value with capitalised goodwill on 30 June 596 705

Equity, as reported 57 085 54 501

Effect of capitalised goodwill in balance sheet on 1 July 705 1 926

Additions / disposals 279 92

Effect of capitalised goodwill in the income statement – 798 – 1 313

Equity with capitalised goodwill on 30 June 57 271 55 206

65


64

14 Accrued Liabilities

Accrued liabilities 30 June 2011 30 June 2010

Deferred expenses 5 032 5 192

Income received in advance (for long-term contracts) 1 658 2 044

Accruals / deferrals for vacation, overtime, bonuses 1 940 2 201

Total other Current Payables 8 630 9 437

15 Financial Liabilities

Financial Liabilities Term Interest Rate Collateral 30 June 2011 30 June 2010

Loan indefinite 3.00% none 0 106

Other financial liabilities until 30/06/11

0.08% none 0 75

Total Financial Liabilities 0 181

Unused Credit Limits 2 000 1 783

16 Taxes

Deferred Taxes 30 June 2011 30 June 2011 30 June 2011 30 June 2010 30 June 2010 30 June 2010

Assets Liabilities Net Assets Liabilities Net

Use of tax loss carryforwards 1 653 0 – 1 653 2 072 0 – 2 072

Receivables 0 232 232 0 367 367

Work in progress / inventories 0 147 147 0 59 59

Financial assets 0 0 0 0 56 56

Property, plant and equipment

4 328 324 39 328 289

Intangible assets 0 95 95 3 94 91

Prepaid pension assets 0 419 419 0 411 411

Share-based payments 0 0 0 0 0 0

Liabilities 3 77 74 46 77 31

Total Deferred Taxes 1 660 1 298 – 362 2 160 1 392 – 768

Netting – 427 – 427 0 – 797 – 797 0

Deferred Taxes 1 233 871 – 362 1 363 595 – 768


6266

A deferred tax asset is recognised for the carryforward of unused tax losses and unused

tax credits to the extent that it is probable that future taxable profit will be available

against which the unused tax losses and unused tax credits can be utilised.

Provided a Group entity has suffered a loss in either the current or preceding year,

deferred tax assets are recognised to the extent that they can be offset with profits

resulting from the recognition of deferred tax liabilities. Should these be insufficient,

the remaining tax assets are recognised to the extent that they can be offset with future

taxable profits. The Group determines these gains based on the budget as well as on

corresponding general and realisable tax strategies. Therefore, deferred tax assets of

TCHF 898 (previous year: TCHF 766) were capitalised, which most likely can be used

against future profits.

The existing tax loss carryforwards can be used as follows:

Expiry of Loss Carryforwards 30 June 2011 30 June 2010

Next 3 years 0 0

4 – 7 years 10 720 13 990

After 7 years 870 880

Total Tax Losses 11 590 14 870

Thereof tax losses for which deferred tax assets were recorded 7 426 9 479

Tax losses for which no deferred tax assets were recorded 4 164 5 391

Unrecorded deferred tax assets 882 1 172

Income Tax Expense July – June 2010/2011

July – June 2009/2010

Current tax – 275 – 228

Deferred tax – 389 – 101

Total Income Tax Expense – 664 – 329

The income tax expense calculated on the profit before tax differs from the theoretical tax

expense, which is based on the domestic rate in which the Group is domiciled, as follows:

Income Tax Expense July – June 2010/2011

July – June 2009/2010

Profit before tax 5 356 3 528

Domestic rate in which the entity is domiciled 21.17% 21.17%

Tax expense at the domestic rate – 1 134 – 747

Effect of different tax rates in other tax jurisdictions 78 35

Effect from disposal of subisidiaries – 28 0

Non-tax-deductible expenses 95 – 160

Tax losses from current year for which no deferred tax assets were recognised – 89 – 97

Use of tax losses for which no deferred tax assets were recognised in previous periods 428 694

Prior-year adjustments – 3 – 2

Translation and other adjustments – 11 – 52

Total Income Tax Expense – 664 – 329


67

The effect from the difference between the expected tax rate and the effective tax rate

results from the fact that in the reporting year tax loss carry-forwards could be used to

offset profits, for which no deferred tax asset was set up in the prior years.

17 Accruals and Deferrals Relating to Pensions The plan assets of the pension funds are held in separate legally independent founda-

tions, while CREALOGIX maintains separate accounts. In order to cover the insurance

benefits for the risks death, disability and longevity, a counter guarantee with a collec-

tive insurer is maintained.

The information about the financial situation of the pension funds are always based

on the preceding closing as of 31 December. In the amount of the declared deficit,

CREALOGIX has granted a conditional waiver of usage for the employer contribution

reserves. To the extend of the waiver of usage, the nominal value of the employer con-

tribution reserve was value adjusted and the remaining portion was capitalised in the

balance sheet. As a result of the waiver, no economic liability exists for CREALOGIX.

Employer Contribution Reserve July – June 2010/2011

July – June 2009/2010

Nominal value at 1 July 3 279 2 765

Additions 0 400

Interest 40 114

Nominal value at 30 June 3 319 3 279

Appropriation waiver – 1 319 – 1 319

Balance Sheet at 30 June 2 000 1 960

Interest 40 114

Release appropriation waiver 0 456

Additions appropriation waiver 0 – 522

Impact on personnel expense 40 48

66


Economic benefit / economic liability and pension costs July – June 2010/2011

July – June 2009/2010

Funded Status at 1 July – 1 284 – 2 477

Movement 206 1 193

Funded Status at 30 June – 1 078 – 1 284

Economic share of CREALOGIX at 1 July 0 0

Economic share of CREALOGIX at 30 June 0 0

Effect on income statement 0 0

Employer contribution – 1 738 – 1 969

Pension costs included in personnel expense – 1 738 – 1 969

18 Share Capital

July – June 2009/2010 Number of shares Capital

Issued shares

Treasury shares

Total shares Issued shares Treasury shares Total shares

At 1 July 2009 1 070 000 – 37 262 1 032 738 8 560 – 2 119 6 441

Treasury shares purchased – 49 432 – 49 432 – 2 919 – 2 919

Treasury shares sold 45 194 45 194 2 977 2 977

Treasury shares used for share-based payments

30 538 30 538 1 406 1 406

At 30 June 2010 1 070 000 – 10 962 1 059 038 8 560 – 655 7 905

July – June 2010/2011

At 1 July 2010 1 070 000 – 10 962 1 059 038 8 560 – 655 7 905

Treasury shares purchased – 29 223 – 29 223 – 2 262 – 2 262

Treasury shares sold 8 102 8 102 477 477

Treasury shares used for share-based payments

28 616 28 616 2 098 2 098

At 30 June 2011 1 070 000 – 3 467 1 066 533 8 560 – 342 8 218

A total of 1 070 000 registered shares are outstanding at 30 June (previous year:

1 070 000). The equity comprises TCHF 4799 (previous year: TCHF 4910) non-distrib-

utable reserves.

Since 1 March 2007, each share has a par value of CHF 8.

Since 5 September 2000, the Company’s conditional share capital consisted of 250 000

nominal shares with a par value of CHF 8 per share for employee option plans.

Since 2 November 2009, the authorised capital consisted of 300 000 nominal shares

with a par value of CHF 8 per share for the purpose of acquisitions.

The reduction in value of TCHF 313 (previous year: 1464) was accounted for in share-

holders’ equity. The shares are held as treasury shares. The Company is entitled to re-

sell these treasury shares in the future.

69


68

19 Personnel Expenses

Personnel Expense July – June 2010/2011

July – June 2009/2010

Wages and salaries – 26 704 – 26 595

Social security costs – 2 121 – 2 358

Pension fund costs – 1 738 – 1 921

Other personnel expenses – 1 929 – 1 381

Total Personnel Expenses – 32 492 – 32 255

Full-time employees 232.7 233.4

Headcount at 30 June 236 265

20 Financial Result

Financial Result July – June 2010/2011

July – June 2009/2010

Interest income 211 138

Gain on marketable securities /dividends 225 613

Total Financial Income 436 751

Interest expense – 29 – 22

Foreign exchange loss – 271 – 454

Other financial expenses – 21 – 23

Total Financial Expense – 321 – 499

Financial Result 115 252


21 Earnings Per Share

Undiluted

Basic earnings per share is calculated by dividing the profit attributable to CREALOGIX

shareholders by the weighted average number of outstanding shares during the fiscal

year, excluding treasury shares.

Undiluted July – June 2010/2011

July – June 2009/2010

Profit attributable to ordinary equity holders of CREALOGIX Holding AG 4 692 3 199

Weighted average number of ordinary shares outstanding 1 063 627 1 052 257

Basic earnings per share 4.411 3.040

22 Liabilities

Operating lease obligations

The Group rents office space and vehicles under non-cancelable operating lease agree-

ments. The lease agree-ments are subject to various conditions, rental increase clauses

and extension options. The lease and rental expenses recognised in the income state-

ment for the current year.

The future aggregate minimum lease payments required under non-cancelable operat-

ing leases are as follows:

Future Minimum Lease Payments 30 June 2011 30 June 2010

Due within 1 year 1 351 1 714

Due between 1 and 5 years 1 651 3 117

Due > 5 years 0 0

Total Future Obligations 3 002 4 831

In January 2008, a rental agreement was signed for office space in the Baslerpark in

Zurich until 31 December 2013.

23 Legal Restructuring / Acquisition of subsidiaryOn 11 August 2010, CREALOGIX Transport & Logistics AG was incorporated.

CREALOGIX Unified Communications GmbH, Köln/Germany, was sold to the former

owner on 29 December 2010 and on 30 December 2010 CREALOGIX ERP AG,

Thalheim/Austria, was sold to WIKA Systems Schweiz AG. In the course of these

divestments, net assets of TCH 646 were sold. On 1 February 2011, terna GmbH took

over all business activities of CREALOGIX ERP AG, Villingen/Germany in an asset

deal.

71


70

24 Related-Party Disclosures

Related parties include members of the Board of Directors, the executive board and

other key personnel as well as friends and family members of the aforementioned

persons, major shareholders and companies controlled by them, associated companies,

and the Group‘s pension funds.

a) Major Shareholders

The Group is controlled by Bruno Richle, Richard Dratva, Daniel Hiltebrand and Peter

Süsstrunk, who together have a 69.1 percent shareholding in the company. The re-

maining 30.9 percent of shares are in free float.

b) Group Companies and Associates

Note 1 provides an overview of the Group companies and associates. Transactions be-

tween the parent and its subsidiaries and those between Group companies have been

eliminated in the consolidated financial statements.

c) Key Management Personnel

The Board of Directors and the Executive Board are composed as follows:

Board of Directors Executive Board

Bruno Richle Bruno Richle (CEO)

Dr. Richard Dratva Dr. Richard Dratva

Jean-Claude Philipona Juerg A. Haessig (CFO)

Prof. em. Dr. Beat Schmid Dr. Louis -Paul Wicki

Dr. Christoph Schmid Thomas F.J. Avedik


d) Compensation

July – June 2010/2011 Annual Fixed

Compensa-tion

Annual Variable

Compensa-tion

Share-Based

Payments

Social Security

Contribu-tions

Payment in kind

Total

Board of Directors

Bruno Richle, President and CEO 0 0 0 0 0 0

Dr. Richard Dratva, Vicepresident and CSO

0 0 0 0 0 0

Jean-Claude Philipona, Member 30 12 0 2 0 44

Prof. em. Dr. Beat Schmid, Member 30 9 10 2 0 51

Dr. Christoph Schmid, Member 30 18 4 3 3 58

Total Board of Directors 90 39 14 7 3 153

Executive Board (6 members, from 1 September 5 members)

1 054 603 42 393 42 2 134

Total 1 144 642 56 400 45 2 287

Highest compensation to Bruno Richle, chairman of the Board and CEO

241 144 10 112 9 516

July – June 2009/2010 Annual Fixed

Compensa-tion

Annual Variable

Compensa-tion

Share-Based

Payments

Social Security

Contribu-tions

Payment in kind

Total

Board of Directors

Bruno Richle, President and CEO 0 0 0 0 0 0

Dr. Richard Dratva, Vicepresident and CSO

0 0 0 0 0 0

Jean-Claude Philipona, Member 30 12 0 2 0 44


Dr. Christoph Schmid, Member 30 18 8 3 0 59

Total Board of Directors 90 39 18 7 0 154

Executive Board (6 members) 1 191 815 118 432 44 2 600

Total 1 281 854 136 439 44 2 754

Highest compensation to Bruno Richle, chairman of the Board and CEO

241 249 42 119 9 660

1) Compensation of members of the Board of Directors the Executive Board

For discharging their duties, the non-executive members of the Group’s Board of

Directors receive an annual fixed salary plus additional reimbursement per meeting

related to their committee membership.

The executive members of the Group’s Board of Directors, members of the Executive

Board, and other key per-sonnel receive contractually agreed compensation for their

role in the company’s operations. Fixed compensation includes annual salary, company

vehicle, and lump-sum expense reimbursement. Variable compensation consists of the

bonus.

2) Social Insurance Contributions

Social insurance contributions consist of the actual regulatory premiums paid to the

pension foundation during the current fiscal year.

73


72

3) Share-Based Payments

As disclosed on page 23, a profit-sharing program is in place for the Board of Directors

and selected management members and employees. The fair value is the basis for the

valuation of expenditures recorded in the income statement relating to options

granted to related parties.

4) Other Compensation and Credits

There were no further claims or commitments to/from persons in key management

positions in the current year (previous year: none).

No long-term payments or severance payments were made in 2010/2011 (prior year:

none).

In relation to legal consultation, services were provided in the current fiscal year by

Wenger & Vieli AG, a law firm closely related to Director Dr. Christoph Schmid.

Wenger & Vieli‘s fees for legal advice totaled TCHF 82 (previous year: TCHF 66).

The Group additionally granted an unsecured loan amounting to TCHF 200 to a share-

holder and member of the management. This is a variable-rate loan with no fixed

term. Interest on the loan is charged at 2.250 percent (previous year: 2.375 percent).

5) Shareholdings

As of 30 June 2011, members of the board of directors, the executive board, other

key personnel as well as major shareholders owned CREALOGIX shares and employee

stock options as follows:


CREALOGIX Shares CREALOGIX Employee Options

30 June 2011 30 June 2010 30 June 2011 30 June 2010

Board of Directors

Bruno Richle, President and CEO 246 887 245 747 1 951 1 951

Dr. Richard Dratva, Vicepresident and CSO 253 567 252 427 1 951 1 951

Jean-Claude Philipona, Member 336 336 900 900


Dr. Christoph Schmid, Member 3 140 2 000 1 000 1 160

Members of the Executive Board

Thomas Avedik, member of the Group executive board and CEO of CREAOGIX E-Banking AG

428 200 5 600 5 600

Juerg A. Haessig, member of the Group executive board and CFO

2 040 900 146 146

Dr. Louis-Paul Wicki, member of the Group executive board and CEO of CREALOGIX E-Business AG

4 197 3 057 4 280 6 280

Other Significant Shareholders

Noser Management AG 42 000 42 000 0 0

Total 554 538 548 154 16 728 18 888

25 Contigent assets and liabilities The contingent liability existing in connection with the acquisition of BVIconsult AG,

Zuchwil in November 2009, no longer exists. Based on the unthought-of positive devel-

opment of the business, the deferred contingent purchase price obligations of maximal

CHF 0.8 million became due at the contractual payment date.

26 Subsequent Events On 28 July 2011, CREALOGIX AG acquired the entire business involving e-banking

and portal clients under the Abaxx name from Cordys Deutschland AG in Germany in

the form of an asset deal. This transaction extends the CREALOGIX product portfolio

and strengthens its presence on the German market.

7574


77


76

Getting education moving

MOBILE LEARNING

MOBILE LEARNING

7879

The challengeHow can educational establishments impart knowledge in a straightforward manner to their students and guar-antee successful learning? New approaches are needed; young people who travel frequently prefer mobile so-lutions. Learning must be done easily and quickly, wher-ever you happen to be.

The solutionMobile telephone apps are particularly suitable for learning. CREALOGIX develops them for iPhones or An-droid-based smartphones. They enable students to ac-quire or deepen their basic knowledge on specific topics. When the touch screen is activated the learning modu -les with the relevant questions appear. Depending on the task, the user answers them by drag & drop, multiple and single choice or right/wrong indications. Information as to where the solution can be found in the printed teaching material can also be provided, together with a background display of the correct answer.

The contents are produced in the database-assisted au-thor’s tool CLX.Testpool. Apart from the know-how for technical implementation of the solution, CREALOGIX also has the teaching experience necessary for preparing the learning contents and make them fit for the differ -ent media./// www.crealogix.com/education

8181

Balance Sheet 82

Income Statement 83

Notes to Financial Statements 84

Proposal of the Group Board of Directors 86

Report of the Auditors 88

8081

CREALOGIX FINANCIAL STATEMENT HOLDING AG

FINANCIAL STATEMENT HOLDING AG

BALANCE SHEETAmounts in thousands of CHF 30 June 2011 in % 30 June 2010 in %

A S S E T S

Cash and marketable securities 27 249 19 499

Other current receivables 8 62

Accounts receivable from subsidiaries 5 915 12 414

Treasury shares 322 636

Current Assets 33 494 68.3 32 611 66.2

Financial assets 15 559 16 673

Non-Current Assets 15 559 31.7 16 673 33.8

Total A S S E T S 49 053 100.0 49 284 100.0

L I A B I L I T I E S A N D S H A R E H O L D E R S’ E Q U I T Y

Trade payables 23 4

Other current liabilities 624 599

Accounts payable to subsidiaries 3 631 3 340

Accrued liabilities 24 85

Total Liabilities 4 302 8.8 4 028 8.2

Share capital 8 560 8 560

General 250 250

Share premium 41 567 43 700

Legal reserves 41 817 43 950

Free reserves – 352 – 664

Reserve for treasury shares 342 655

Retained earnings – 5 616 – 7 245

Shareholders’ Equity 44 751 91.2 45 256 91.8

Total L I A B I L I T I E S A N D S H A R E H O L D E R S’ E Q U I T Y

49 053 100.0 49 284 100.0

83


82

INCOME STATEMENT

Amounts in thousands of CHF July – June 2010/2011

July – June 2009/2010

Group Revenue 1 506 1 608

Personnel expense – 188 – 156

Marketing expense – 5 0

Insurance expense and duties – 7 – 10

Consulting expense – 36 – 54

Other third-party operating expenses – 56 – 95

Group operating expenses – 152 – 733

Operating Expenses – 256 – 892

Operating Result before Interest and Taxes 1 062 560

Financial income 2 351 1 486

Financial expense – 1 784 – 818

Financial Result 567 668

Profit before Tax 1 629 1 228

Income tax expense 0 0

Net profit 1 629 1 228


NOTES TO THE FINANCIAL STATEMENTS

1 Joint and Several Liability for debt from value added taxThe CREALOGIX subsidiaries in Switzerland are treated as a single taxable entity for VAT

purposes (group taxation, art. 22 VAT law). If one of the Group companies is unable to

meet its payment obligations to the Federal tax authorities, the other Group companies are

jointly and severally liable.

2 Subsidiaries

Company Activity Capital Interest held

Proportion of voting

rights

CREALOGIX E-Business AG, Bubikon, Switzerland


CHF 100 000 100% 100%

CREALOGIX E-Banking AG, Zurich, Switzerland


CHF 100 000 100% 100%

CREALOGIX Transport & Logistics AG, Zurich, Switzerland

Consultancy and services in the area for solutions in the transport and logistics industrie

CHF 100 000 100% 100%

CREALOGIX ERP AG, Villingen, Germany Development / trading of software EUR 50 000 100% 100%

CREALOGIX AG, Frankfurt, Germany(from 5.9.2011 Stuttgart)


EUR 100 000 100% 100%

CREALOGIX Corp., Toronto, Canada Consultancy and services in information technology and data communication

CAD 100 000 100% 100%

Changes to subsidiaries compared to previous year, are shown in note 23 of the con-

solidated financial statements.

3 Treasury Shares Quantity Average Share

PriceValue

at 1 July 2010 10 962 58.00 635 796

Purchases 2010/2011 29 223 77.39 2 261 516

Sales 2010/2011 – 36 718 70.13 – 2 575 137

at 30 June 2011 3 467 92.93 322 175

The reserve for treasury shares amounts to TCHF 342 (previous year: TCHF 655),

which equals the acquisition costs.

85


84

4 Share CapitalSince 5 September 2000, 1 070 000 nominal shares of the company were outstanding:

these are all fully paid-in. Each share has a nominal value of CHF 8 since their devalua-

tion on 1 March 2007. Share capital amounts to CHF 8 560 000 since 1 March 2007.

The conditional share capital with 250 000 shares with a nominal value of CHF 8 for

staff share option plans has existed since 5 September 2000.

The authorised capital with 300 000 shares with a nominal value of CHF 8 and reserved

for business combinations has existed since 2 November 2009.

30 June 2011 30 June 2010

Contingent share capital 2 000 000 2 000 000

Authorized share capital 2 400 000 2 400 000

5 Significant Shareholders As at 30 June 2011, each of the following shareholders held more than 3 percent of the

voting rights:

Shareholders Share of Votes No. of Shares

30 June 2011 30 June 2010 30 June 2011 30 June 2010

Richard Dratva 23.70% 23.59% 253 567 252 427

Bruno Richle 23.07% 22.97% 246 887 245 747

Daniel Hiltebrand 15.26% 15.26% 163 324 163 324

Peter Süsstrunk 6.92% 6.92% 74 000 74 030

Noser Management AG 3.93% 3.93% 42 000 42 000

Disclosure of ownership ratios are shown here without, and in the Corporate Gover-

nance section on page 15 including share options.

6 Other DisclosuresDetails regarding compensation, credits, and other transactions with members of the

Board of Directors and the Group Executive Board are shown in Note 24. The neces-

sary detailed information to risk management is included in the consolidated financial

statements on page 53 to 55.

In the reporting year valuation reserves of TCHF 528 (previous year: TCHF 72) were

released.


7 Proposal of the Board of Directors to the General Meeting

July – June 2010/2011

July – June 2009/2010

Allocation of accumulated loss

Retained earnings, 1 July – 7 245 – 8 473

Net profit 1 629 1 228

Total retained earnings – 5 616 – 7 245

Appropriation for general reserves 0 0

Retained earnings, 30 June – 5 616 – 7 245

Distribution of share premium – 16 050 – 2 140

8787868786


89


89888988

91919091

CREALOGIX ADDRESSES AND LOCATIONS

BERN

ZURICH

STUTTGART

BUBIKON

HÜNENBERG

ZUCHWIL

ADDRESSES

ADDRESSES AND SITES

SWITZERLAND

ZURICH

CREALOGIX Holding AG

Baslerstrasse 60

CH-8048 Zurich

T +41 58 404 80 00

F +41 58 404 80 90

CREALOGIX E-Banking AG

Baslerstrasse 60

CH-8048 Zurich

T +41 58 404 87 57

F +41 58 404 87 60

CREALOGIX E-Business AG

Geschäftsstelle Zürich

Baslerstrasse 60

CH-8048 Zurich

T +41 58 404 81 21

F +41 58 404 82 65

CREALOGIX Transport

& Logistics AG

Baslerstrasse 60

8048 Zurich

T +41 58 404 88 00

F +41 58 404 88 99

BERN

CREALOGIX E-Banking AG

Filiale Bern

Mühlemattstrasse 53

CH-3007 Bern

T +41 31 381 31 57

F +41 31 381 31 59


Geschäftsstelle Bern

Mühlemattstrasse 53

CH-3007 Bern

T +41 31 381 31 57

F +41 31 381 31 59

BUBIKON


Rosengartenstrasse 6

CH-8608 Bubikon

T +41 55 253 21 21

F +41 55 253 21 20

HÜNENBERG

CREALOGIX E-Payment AG

Bösch 83B

CH-6331 Hünenberg

T +41 41 784 55 55

F +41 41 784 55 66

ZUCHWIL

CREALOGIX E-Payment AG

Filiale Zuchwil

Hauptstrasse 55

4528 Zuchwil

T +41 32 686 81 88

F +41 32 686 81 80

GERMANY

STUTTGART

CREALOGIX AG

Breitscheidstrasse 10

70174 Stuttgart

T +49 711 61416 0

F +49 711 61416 1111

/// www.crealogix.com

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crealogix group annual report 2010/2011 · we adjusted our marketing strategy slightly; we now...

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